The announcement was made as part of the government Spending Review (SR25) which was released yesterday (12 June 2025).
The review also included the promise of funding for local authorities to deliver Simpler Recycling as part of the Collection and Packaging waste reforms, but the amount was not confirmed.
Reeves said: “To back British industry’s pioneering work in Carbon Capture, Usage and Storage, last year we announced funding for two sites on Merseyside – and in Teesside where we are building the world’s first commercial scale CCUS power plant.”
The chancellor confirmed that the government will focus on maximise deployment to fill the storage capacity of the East Coast Cluster and the HyNet Cluster.
The government is set to engage in further negotiations with “multiple important emitters” to connect them to the HyNet network, including in Wales.
Mike Maudsley, CEO of Energy from Waste (EfW) company Enfinium, said: “Enfinium welcomes the UK government’s announcement today of increased funding for carbon capture, alongside further backing for Wales in its efforts to transition to net zero.”
Olivia Powis, CEO of the Carbon Capture and Storage Association (CCSA), added: “The CCSA welcomes this statement of support for CCUS in today’s Comprehensive Spending Review.
“The commitment to taking Final Investment Decision this Parliament, subject to readiness and affordability, for these clusters is welcome and helps towards giving industry the confidence it needs to move forward with major investments in low-carbon infrastructure.
“This is a clear step forward to progressing the next clusters in Scotland and Humber. CCUS is critical to decarbonising our industrial heartlands, supporting clean power and enabling low-carbon hydrogen.
“It also plays a key role in protecting and creating thousands of high-quality jobs across the country in critical industries like cement, chemicals and refining, and the power system – all of which are essential for meeting the government’s commitments on new infrastructure and housebuilding.
“Today’s announcements help position the UK as a world leader in carbon capture technologies.”
Economic growth
Overall, the spending review had big themes of cutting down wasteful spending and enhancing growth – a common theme throughout the last 11 months of Labour’s time in government.
David Palmer-Jones, business recycling company CEO of CIRQLR, said: “We welcome a Spending Review that creates jobs and fixes the foundations for a more sustainable growth economy.
“The recycling and waste management sector backs the Treasury’s commitment to a modern industrial strategy and we are investing to ensure all key industrial sectors have a security of materials supply chain to fulfil the government commitment to grow the economy and benefit all working people.
“CIRQLR is investing today in the recycling infrastructure to help UK domestic industries with better materials security today and tomorrow as we give waste a second life to help build Britain back stronger within the lifetime of this parliament.”
The Global Plastics Treaty
While the government review focused on EfW and CCUS, it did not make mention of the plastics crisis in the UK and wider.
The UK produces millions of tonnes of plastic waste annually, but recycling rates remain low with much of the material stream ending up in landfill or incineration.
The next round of the Global Plastics Treaty will take place from 5 to 14 August 2025 in Geneva, Switzerland and will look to create a legally binding global agreement to end plastic pollution.
Sian Sutherland, co-founder of charities A Plastic Planet and the Plastic Health Council, said: “While the government’s commitment to increasing investment in clean energy is a positive step towards reducing reliance on fossil fuels, it is simply not enough to address the multifaceted environmental crisis we face.
“Plastic is a climate issue not a waste issue, and cracking down on its use and production is a popular way to reach net zero without spending a penny. Banning more plastics in more applications would see a boom in the British industry of alternative materials and reduce emissions.
“Being the first country to pledge a phase out of polluting plastics would put us at the forefront of negotiations for a strong Global Plastics Treaty.”
Want to find out more about some of the major policy changes that will affect the UK waste and recycling sector? Attend the Letsrecycle National Conference on 3 July 2025 in London. Find out more and buy your ticket here.
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