Teesworks’ £4bn carbon capture projects gets green light from government

The CCUS element will trap harmful by-product gases, compress them, and store them in huge underground tanks beneath the North Sea. The fledgling technology is touted as an alternative to releasing carbon into the atmosphere.

The Prime Minister, Sir Keir Starmer, Chancellor, Rachel Reeves and Energy Secretary, Ed Miliband, are in Liverpool today to announce a similar project on Merseyside, as well as Net Zero Teesside.

Sir Keir said: “We’re reigniting our industrial heartlands by investing in the industry of the future.

“For the past 14 years, business has been second-guessing a dysfunctional government – which has set us back and caused an economic slump.

“Today’s announcement will give industry the certainty it needs – committing to 25 years of funding in this groundbreaking technology – to help deliver jobs, kickstart growth, and repair this country once and for all.”

Operations are expected to begin in 2027, and the project will create 3,000 construction jobs and a further 1,000 permanent jobs once the plant is operational.

While Ms Reeves, the MP for Leeds West and Pudsey, added: “This game-changing technology will bring 4,000 good jobs and billions of private investment into communities across Merseyside and Teesside, igniting growth in these industrial heartlands and powering up the rest of the country.

“Working in partnership with business is at the heart of our plan to deliver strong growth and investment, so we can rebuild Britain and make everyone better off.”

Tees Valley Mayor, Ben Houchen, said: “This is a monumental day for Teesside and my proudest achievement since becoming Mayor, and I want to thank the Government for giving the green light to this project.

“The Net Zero Teesside project will provide power to 1.3million homes, help with energy security, but more importantly it will give generational job opportunities to local people as Teesworks becomes the new ICI – providing investment, training and well-paid jobs for local people.”

As a Nationally Significant Infrastructure Project, Net Zero Teesside was not subject to the regular planning process via local authorities, but instead went through a two and a half year process with the government’s Planning Inspectorate.

The gas power station will be built on land where the Redcar steelworks blast furnace stood until Autumn 2022.

Following accusations of “corruption” at the site by MPs in the House of Commons, it was reported in May last year that Equinor and BP had added extra legal guarantees in their tenancy agreements which guaranteed assets had not been acquired through “an unacceptable act”.

The regeneration scheme was initially a 50-50 joint venture between public body South Tees Development Corporation (STDC) and two local businessmen, Chris Musgrave and Martin Corney.

A transfer of shares in November 2021 saw the businessmen take control of 90 per cent of Teesworks Ltd, the company vehicle for the scheme, which was supported by Mayor Ben Houchen.

More than £500 million of taxpayers’ money has been spent, with Mr Musgrave and Mr Corney extracting at least £120m via dividends and other payments.

A government review, published in January, found “no evidence of illegality”, but made 28 recommendations for improvements in governance and transparency.

Mr Musgrave made a rare public comment following the announcement, saying: “This is fantastic news for Teesside. The Government’s support for Net Zero Teesside means real opportunities for local people – creating jobs, attracting investment, and making our region a leader in clean energy.

“Over the past few years, we’ve been clearing the former steelworks and preparing the site for projects like this. It’s a huge step towards a greener future for us all, and I’m proud that the Teesworks site will be at the heart of it."