On 12 June 2025 the UK Department for Energy Security and Net Zero announced approximately GBP 200 million (subject to business case) in development funding for the Acorn carbon capture and storage (CCS) project at St Fergus, Aberdeenshire, and for National Gas's SCO2T Connect pipeline, which repurposes 175 miles of existing gas pipeline plus 35 miles of new-build pipeline to carry CO2 captured at Grangemouth to North Sea storage. The award forms part of a wider GBP 9.4 billion Spending Review 2025 commitment to carbon capture, utilisation and storage (CCUS), alongside a parallel award to the Viking CCS project in the Humber. Government cites up to 15,000 jobs at Acorn's peak construction and the safeguarding of an estimated 18,000 existing North Sea jobs.

Analyst notesShow

Mechanism

The Spending Review 2025 CCUS envelope (GBP 9.4bn total) is being disbursed project-by-project as business cases clear; the 12 June 2025 GOV.UK announcement is DESNZ meeting "in full" Acorn's development-funding request of around GBP 200 million — described as the first time a UK government has funded a CCS project at this scale — while separately providing financial cover for National Gas's SCO2T Connect pipeline project, which repurposes an existing gas pipeline to move captured CO2 from the Grangemouth industrial cluster to Acorn's North Sea storage site. This is domestic infrastructure/development-stage state aid rather than a trade-restrictive measure, but it sits in the Western industrial-policy stack alongside fusion (STEP) and semiconductor subsidy commitments from the same Spending Review — state capital de-risking a strategically targeted energy-transition technology ahead of full commercial viability.

Downstream implications

Establishes Acorn/SCO2T as the anchor CO2-transport corridor for the

Scottish industrial cluster (Grangemouth, St Fergus), likely triggering follow-on procurement and construction-partner state-aid actions as the project moves from development to a Final Investment Decision.

Parallel Viking CCS award (Humber) referred to the CMA for subsidy

control review under the same Spending Review CCUS envelope — a companion action if a comparable primary source for Viking's award is confirmed separately.

Domestic CCS build-out reduces the UK's exposure to imported CO2

transport/storage capacity and anchors a regional "oil and gas to CCS" jobs transition in Aberdeenshire and the North Sea supply chain.

Open questions

Whether the GBP 200m Acorn figure and Viking's development-funding

figure (announced separately) should eventually be filed as a joint responds_to pairing once Viking is filed under its own primary source.

Final Investment Decision timing and whether the "subject to business

case" contingency in the GOV.UK release results in a later confirmed funding amendment.

Sources

Primary: GOV.UK: Funding secured for Britain's industrial future

Secondary: Global Trade Alert state act 94299

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Mechanism

Downstream implications

Establishes Acorn/SCO2T as the anchor CO2-transport corridor for the

Parallel Viking CCS award (Humber) referred to the CMA for subsidy

control review under the same Spending Review CCUS envelope — a companion action if a comparable primary source for Viking's award is confirmed separately.

Domestic CCS build-out reduces the UK's exposure to imported CO2

transport/storage capacity and anchors a regional "oil and gas to CCS" jobs transition in Aberdeenshire and the North Sea supply chain.

Open questions

Whether the GBP 200m Acorn figure and Viking's development-funding

figure (announced separately) should eventually be filed as a joint responds_to pairing once Viking is filed under its own primary source.

Final Investment Decision timing and whether the "subject to business

case" contingency in the GOV.UK release results in a later confirmed funding amendment.