Set to be deployed by 2023, the respective Acorn and Viking projects join two other CCUS clusters, HyNet cluster in North West England and North Wales, and the East Coast Cluster in the Teesside and Humber, which the UK government has committed to deploy by the mid-2020s.

Together, the UK government said the four clusters could support up to 50,000 jobs in the UK by 2030.

Energy security secretary Grant Shapps said: “In the wake of Putin’s barbaric invasion of Ukraine, our energy security is more important than ever. The North Sea is at the heart of our plan to power up Britain from Britain so that tyrants like Putin can never again use energy as a weapon to blackmail us.

“Today’s commitment to power ahead with new oil and gas licences will drive forward our energy independence and our economy for generations. Protecting critical jobs in every region of the UK, safeguarding energy bills for British families and providing a homegrown fuel for our economy that, for domestic gas production, has around one-quarter the carbon footprint of imported liquified natural gas.

“Our next steps to develop carbon capture and storage, in Scotland and the Humber, will also help to build a thriving new industry for our North Sea that could support as many as 50,000 jobs, as we deliver on our priority of growing the economy.”

Dr Nick Cooper, CEO of Acorn lead developer Storegga, said: “We are thrilled that the Acorn Project has advanced directly into Track-2. Acorn has been progressed by the development partners as the Track-1 reserve since late 2021 and is ready to move promptly to support the decarbonisation of Scotland and the wider UK.

“Today’s news is a defining milestone for us, and the Scottish Cluster. Acorn will be a major contributor towards meeting the UK and Scotland’s carbon reduction targets, able to serve emitters connected by pipeline and ship.

“As lead developer, Storegga thanks Acorn partners and Scottish Cluster participants for their support and we look forward to working with government to deliver the multiple benefits of creating and future-proofing jobs, bringing inward economic investment, developing green-tech industries and, crucially helping decarbonise Scotland and the UK.”

Robert Aitken, director at KPMG UK in Aberdeen, added: “The Acorn CCS project funding announcement is a positive development for the North East of Scotland and will greatly benefit the local economy by tapping in to the region’s existing North Sea infrastructure, skills and supply chain.

“The project aligns with the oil and gas industry’s efforts to prioritise greener energy projects while maintaining stable domestic energy supply. The announcement also acknowledges Aberdeen and Aberdeenshire’s critical role in the energy transition, recognising the region’s skills and talent as essential in achieving net-zero targets.”

Simon Roddy, senior vice president of Shell UK‘s Upstream business, said: “This is an important step forward for one of the UK’s leading CCS clusters. The Acorn Project is a central part of plans to decarbonise North Sea operations, and to store emissions from other parts of Scottish industry. As technical developer, we bring Shell’s global experience of CCS and the delivery of major projects. To stimulate investment in this and other CCS clusters, continued co-operation with governments will be key to finding the most innovative approaches and business models to allow CCS to reach the scale needed to help the UK achieve net zero.”

Alistair Phillips-Davies, chief executive of SSE, said: “Carbon capture will play a critical role not only in decarbonising the UK’s power system but also in unlocking economic growth and boosting our energy security, and today’s announcement marks a major step forward in its deployment. We know how important it is that the north-east of Scotland and Humber are decarbonised and the decision to support the Scottish Cluster and Viking Cluster shows that there is commitment to doing so.

“Time remains of the essence. Now, we must move quickly to deploy the transport and storage infrastructure which will underpin the rollout of CCS across the chosen clusters. Doing so will allow crucial low-carbon projects – such as our carbon capture project at Peterhead - to be brought forward, supporting the energy transition while providing good, green jobs and enhancing regional economies. The UK has a real opportunity to lead the world on carbon capture if we can accelerate progress and today’s announcement provides welcome impetus.”