NEWS | Hannah Corbett | May 2024

Efforts to decarbonise industry in Scotland could lead to significant benefits for wider UK economy, but tackling worker and skills shortages is key 

Research led by the Centre for Energy Policy (CEP) based at the University of Strathclyde suggests that establishing a CO₂ Transport and Storage (T&S) sector as part of wider efforts to decarbonise industry in Scotland could generate significant benefits for the wider UK economy. Findings from CEP’s work as part of the Scotland’s Net Zero Infrastructure (SNZI) programme - funded by UKRI’s Industrial Decarbonisation Challenge and focusing on the Acorn T&S system, one of four supported by the UK Government - suggest that these gains could be maximised if action is taken to tackle worker and skills shortages.

CEP’s research, which will be shared at the All-Energy conference, shows that a Scottish T&S CO₂ sector that is fully operational by 2030 could deliver net gains across the UK of just over 3,000 full-time equivalent (FTE) jobs annually and around £300M per year by the early 2040s, but only if action is taken on worker and skills shortages. These figures are respectively 300% and 84% higher than estimates for a scenario where no action is taken to alleviate current and persisting labour market constraints and pressures.

These economic gains could be further amplified if the Scottish CO₂ T&S sector develops an export market to sequester CO₂ emissions from elsewhere in the UK or overseas. If this were the case, FTE jobs supported could increase to just over 4,900 and GDP to nearly £490M per annum by 2042. It is important to note here that these figures are based on continuing government support into the early 2040s. In its CCUS vision, the UK Government sets out an ambition of realising a self-sustaining market by 2035. Thus, an important challenge is what form of Government support may be required after that point, which is likely to depend on how international markets – both for CCUS services and the greener products produced with its use – evolve and develop.

The evidence presented above and corresponding analyses we consider in our SNZI project report for the other regional T&S sectors - linked to the other Track 1 and 2 clusters - reflects the findings and recommendations of the recently published report by the Green Jobs Delivery Group’s CCS Task and Finish Group, to which CEP also contributed. This latter report highlights the potential transformative role of Carbon Capture and Storage (CCS) in the net zero transition if the skilled workforce is available in the right place and at the right time. This vital issue of timing was also underscored by the SNZI research, which pointed to the potential cost implications of deploying the four T&S systems at the same time. Without effective planning and due consideration given to timing, the fuller set of results set out in our SNZI report demonstrate how this could lead to ‘congestion effects’ that would act to constrain economic expansion and exacerbate competition for resources such as labour.
This will ultimately lead to increased costs both for projects and across the wider economy.

Professor Karen Turner, Lead Investigator and Centre for Energy Policy Director, said:

Lessons from CEP’s research on establishing a CO₂ Transport and Storage (T&S) sector in Scotland, alongside, and compared to, other regional T&S sectors emerging around the other Track 1 and 2 CCUS clusters, suggest there are significant potential gains to be had in terms of jobs and economic growth. Crucially, benefits emerging across the wider economy could offset the costs of the investment needed and those of government support. Yet, as with other efforts across the net zero space, a focus on addressing persistent skills and worker shortages is crucial. This is both in terms of maximising economic gains, and enabling a just transition that delivers sustainable and more equitable prosperity. 

Crucially, Government and industry must work together to consider the sequencing of projects to avoid the potential congestion effects of increased demand and competition for resources associated with multiple net zero and other infrastructure projects coming online simultaneously. This will be vital to ensuring that costs to projects, to the wider economy, and ultimately to taxpayers are not driven up unnecessarily. It will also ensure the timely completion of projects that are necessary for the UK to achieve its net zero goals.

Image credit: SSE Thermal