UK Carbon Capture and Storage Market Analysis

UK Carbon Capture and Storage Market Outlook from 2025 to 2035

The UK CCS market is expected to grow at a high rate and is estimated to reach about USD 3,524.9 million by 2035, growing at a CAGR of 16.1% from 2025 to 2035. Growth is supported by government funding, international collaborations, and the establishment of regional CCS clusters that integrate capture, transportation, and storage infrastructure.

The focus areas include decarbonizing industrial clusters, scaling up the production of blue hydrogen, and realizing its storage potential in the North Sea for the UK as a world leader in deploying CCS. In fact, with support from such policies as the CCUS Infrastructure Fund, the cutting-edge CCS project investment is witnessing some investment support.

Attribute	Details
Anticipated Forecast Value (2035)	USD 3524.9 Million
Value CAGR (2025 to 2035)	16.1%

Market Introduction

The UK Carbon Capture and Storage market is at the forefront of Europe’s decarbonization measures, driven by the country’s ambitious target to achieve net-zero emissions levels by 2050. With a focus on reducing emissions in energy-intensive industries, increasing renewable energy projects, and adoption of innovative storage solutions, CCS has emerged as a foundation of the UK’s climate strategy.

The government-led Net Zero Strategy and the Ten Point Plan for a Green Industrial Revolution also place an emphasis on the role of CCS in achieving those emissions reductions, especially in sectors like cement, steel, and chemicals. The geography of the UK, and particularly the enormous offshore storage capacity available in the North Sea, enhances its competitive advantage in the CCS market.

Key Trends

Industrial Decarbonization in Key Clusters

• Focus of UK has also been on cluster areas, Humber, Teesside, and Merseyside, by the UK to abate emissions while having significant contributions to national carbon emissions in it from cement, steel, and chemicals industries housed.
• The East Coast Cluster, on the other side of the Humber and Teesside, was the flagship concept of capturing industrial emissions of CO₂ and pumping it into an underground reservoir offshore.
• HyNet North West aims at integrating CCS with hydrogen production and heavy industries decarbonization within the region of Merseyside.

Offshore Storage Potential in the North Sea

• North Sea in the UK has vast storage capacity in the CO₂. The capacity is mainly provided by depleted oil and gas reservoirs and saline aquifers. Offshore storage projects play the role which accentuates the large-scale CCS efforts in the country, as several projects are already progressing in their directions.
• The Northern Endurance Partnership (NEP), a collaboration between BP, Equinor, and Shell, is developing infrastructure to transport and store CO₂ in the North Sea from industrial clusters in the East Coast.

Scaling Blue Hydrogen Production

• In contrast, the UK Hydrogen strategy seeks to favor a transitional source for energy blue hydrogen, where capture is needed, using CCS during its production for better conformity to UK's long-term transition to clean energy.
• The project of HyNet North West serves towards setting a low-carbon hydrogen economy coupled with regional industries' decarbonization.

Policy and Financial Support

• Government-led initiative such as GBP 1bn CCUS Infrastructure Fund is encouraging the adoption of CCS. Tax Incentives, Grants, as well as clarity in regulatory framework, are providing for the financial facilitation of developers of CCS technology.
• The UK government also pledged to be supportive of at least two CCS clusters by mid-2020s, followed by more.

Collaboration and Innovation

• The UK encourages collaboration among the industries, academies, and international partners for accelerating CCS innovation. Research into advanced capture technologies, cost reduction, and offshore storage efficiency underscores the UK's leadership in CCS deployment.

Segment Analysis

By Technology

• Post-Combustion Capture (45% Share): The most widely used technology for retrofitting existing industrial facilities and power plants.
• Pre-Combustion Capture (8.0% CAGR): Integrated into hydrogen production and gasification plants.

By Application

• Industrial Processes (50% Share): Adoption in iron and steel, cement, and chemical processing drives this segment.
• Power Plant (30% Share): Retrofitting gas-fired plants and integrating CCS into renewable energy projects.

Industry Wise Growth and Trends

Industry	Industrial Sector
CAGR (2025 to 2035)	8.0%
Key Trends	Decarbonization of Humber and Teesside industrial clusters.

Industry	Power Plant
CAGR (2025 to 2035)	6.8%
Key Trends	Retrofitting gas plants with CCS to meet emission targets.

The industrial sector is the leader in terms of CCS adoption, with strong government policies and large investments in decarbonization technologies.

Market Concentration

The UK CCS market is characterized by its presence of global and local players and public-private collaborations.

Established Players

• The massive CCS projects are being led by multinational companies like BP, Shell, and Equinor, which have deep experience in offshore activity and integrated storage systems.

Domestic Innovators

• British firms like Drax Group and SSE Thermal are spearheading the integration of CCS into the existing bioenergy and natural gas power plants. In addition, a notable project aimed at achieving net-zero emissions is that by Drax with its BECCS project.

Research Institutions

• Universities and research organizations like Imperial College London and University of Edinburgh have been enhancing the development of CCS technologies, by investigating cost-effective improvements in efficiency, and also the scalability factor.

Industry Updates

Date	Key Development
March 2025	BP and Equinor expanded the East Coast Cluster project with additional offshore storage sites.
June 2025	The UK government allocated GBP 1 billion for CCS projects under the CCUS Infrastructure Fund.
September 2025	Drax secured approval for its BECCS project, aiming to achieve negative emissions by 2030.
November 2025	HyNet North West began construction on blue hydrogen and CCS infrastructure.a

Future Outlook

Industrial decarbonization, hydrogen economy growth, and the development of offshore storage are major drivers for UK CCS. Major factors include:

Expansion of CCS Clusters

• The projects being developed in the industrial clusters like Humber and Teesside, supported by both government funding and private sector investment, will form the backbone for the adoption of CCS.

Offshore Storage Development

• Storage capacity in the North Sea will be crucial to supporting large-scale CCS projects. Projects such as the Northern Endurance Partnership will continue to further expand offshore infrastructure.

Blue Hydrogen Growth

• CCS is a key component for establishing a low-carbon hydrogen economy through integration into blue hydrogen production.

Focus on Negative Emissions

• The BECCS initiative at Drax will continue to support innovation in delivering negative emissions. This will position the UK at the vanguard of carbon removal technologies.

Advancements in Direct Air Capture

• Investments in DAC will pick up pace as the UK looks for long-term solutions to deal with residual emissions and achieve carbon neutrality.

Table of Content

1. Introduction
2. Market Outlook
3. Key Trends
4. Segment Analysis
5. Industry-Wise Growth and Trends
6. Market Concentration
7. Industry Updates
8. Future Outlook
9. Frequently Asked Questions (FAQs)