The importance of building export capacity in a new Scottish CO2 Transport and Storage industry : alleviating domestic funding pressures and securing green growth and jobs transition

Turner, Karen and Alabi, Oluwafisayo and Katris, Antonios and Calvillo, Christian and Stewart, Jamie and Race, Julia (2022) The importance of building export capacity in a new Scottish CO2 Transport and Storage industry : alleviating domestic funding pressures and securing green growth and jobs transition. University of Strathclyde, Glasgow. (https://doi.org/10.17868/79716)

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Abstract

In this brief we explore the role that export services can play in affecting wider economy outcomes associated with the introduction of a new UK CO2 transport and storage (T&S) industry. A previous briefing on CEP’s work on the SNZI project focussed on considering how a new T&S industry initially focussed on servicing decarbonisation in the Scottish industry cluster at Grangemouth would interact with the wider UK economy. This included supply chain activity, which we identify as potentially replicating and, thus, contributing to sustaining and transitioning jobs and value-added currently supported by the Oil & Gas industry. However, the impacts of introducing new T&S industry activity also depend on who ultimately pays to guarantee demand for its output, involving a range of business model challenges. The central insight emerging was that that introducing a new CO2 T&S does have the potential to deliver economy wide gains such as increased GDP, employment, and earnings. However, gains will be eroded or entirely offset, risking wider economy contraction and employment loss, if socialising costs involved sacrificing household consumption in other sectors, or reducing the competitiveness of heavily traded production activity within the Scottish industry cluster. This brief reports on the subsequent stage of our research, increasingly informed by insight and evidence emerging for the Scottish cluster case as the UK CCUS cluster sequencing process develops alongside the wider SNZI project. Here we focus on further understanding the extent to which the economy wide picture and distributional impacts therein may change (or not) if the Scottish CCUS cluster services both domestic decarbonisation and potential export demand for T&S services.

ORCID iDs

Turner, Karen, Alabi, Oluwafisayo ORCID logoORCID: https://orcid.org/0000-0002-3560-5929, Katris, Antonios ORCID logoORCID: https://orcid.org/0000-0001-9352-2307, Calvillo, Christian ORCID logoORCID: https://orcid.org/0000-0002-5495-6601, Stewart, Jamie and Race, Julia ORCID logoORCID: https://orcid.org/0000-0002-1567-3617;
CORE (COnnecting REpositories)