National Grid is quitting its foray into developing carbon capture and storage in the UK, in a blow to the Government's net zero ambitions.
The FTSE 100 company is abandoning its plans to develop new pipelines in the Humber region to take carbon dioxide emissions out to the North Sea.
Its National Grid Ventures arm is in talks to sell the onshore pipeline project to partners, and has already quit another phase of the project.
Carbon capture and storage is considered key to the Government’s plans to reach net zero carbon emissions by 2050, but is not yet up and running at scale in the UK.
Power plants in the Humber region hoping to start capturing their emissions missed out on a fresh round of government support announced at the end of last month.
National Grid said it wants to focus instead on its electricity networks, which are in major need of upgrades to help cope with the rise in wind farms, electric cars and heat pumps.
A spokesman said it was “committed to managing a smooth transition” as it moved to transfer its carbon capture interests to partners.
To meet its net zero goals, the Government wants about 20-30 million tonnes of the UK’s carbon dioxide emissions to be captured and stored underground by 2030.
National Grid, through its National Grid Ventures arm, has been involved in plans to capture emissions from two of the UK’s biggest industrial areas – Humber and Teesside – and store them under the North Sea.
Under the plans, it would develop 120km pipelines starting at Drax’s power station in North Yorkshire and collecting emissions from factories and power plants in North Lincolnshire, carrying them out towards Easington on the coast.
From there, those emissions as well as emissions piped over separately from Teesside would be piped out to a storage site underneath the North Sea, where they would be stashed to avoid adding to emissions in the atmosphere.
This offshore section of the project has been developed so far by a coalition of companies known as the Northern Endurance Partnership (NEP) including BP, Total, Shell and National Grid Ventures.
However, National Grid Ventures has now quit the NEP and is also in the process of selling its interests in the planned new Humber pipelines to the NEP.
BP is now expected to become the system operator from end to end.
It comes as BP this month bought into a project led by Harbour Energy to develop another storage site in the North Sea, in a sign of its commitment to the emerging industry.
National Grid has recently sold off a majority stake in its gas pipeline arm to a coalition led by Macquarie, as it focuses on electricity networks.
A spokesman for National Grid Ventures said: “NGV has already transitioned out of the Northern Endurance Partnership (NEP), the offshore aspects of the East Coast Cluster.
“We’re in discussion to transfer our interest in the Humber onshore systems to NEP. There is a natural synergy with the overall NEP transportation and storage system, which will serve carbon capture projects across Teesside and the Humber.
“NGV’s decision to transfer our interests to NEP is part of National Grid’s broader strategic focus on the company’s existing UK portfolio, in which they are investing more than £15bn by 2026 to integrate renewables and deliver net zero.
“We are committed to managing a smooth transition in the best interests of the East Coast Cluster and our partners and stakeholders.”