Ed Miliband has confirmed that £200million will be provided to progress the Acorn Carbon Capture and Storage (CCS) scheme in Aberdeenshire.
The Energy Secretary - who visited St Fergus gas terminal where the project will be based - said he had told the company behind the project that he expected it to make a final investment decision by the end of the parliament.
The UK Government is meeting in full the request for development funding of around £200million, subject to business case, to prepare the Acorn project for delivery. He also confirmed funding for the Viking Project in Humber.
As the project develops, funding will also provide financial cover for the National Gas SCO₂T Connect project, to repurpose an existing 175 mile gas pipeline, alongside 35 miles of new build pipeline, to allow CO2 captured at Grangemouth to be transported to storage facilities under the North Sea.
Mr Miliband said: "This government is putting its money where its mouth is and backing the trailblazing Acorn and Viking CCS projects.
"This will support industrial renewal in Scotland and the Humber with thousands of highly-skilled jobs at good wages to build Britain’s clean energy future.
"Carbon capture will make working people in Britain’s hard-working communities better off, breathing new life into their towns and cities and reindustrialising the country through our Plan for Change."
Ed Miliband with AGCC Chief Executive Russell Borthwick yesterday
Tim Stedman, CEO Storegga, lead developer of Acorn, said: "We warmly welcome the UK government’s support for the Acorn project and the commitment to development funding that will enable the critical work needed to reach Final Investment Decision (FID).
"Building on the momentum from the Track 1 projects and significant private sector investment, this milestone is key not only for Acorn but for establishing Scotland’s essential CCS infrastructure needed to grow and scale the UK’s wider carbon capture and storage industry.
"We look forward to working with government in the months ahead to understand the details of today’s commitment, and to ensure the policy, regulatory and funding frameworks are in place to build and grow a world-leading UK CCS sector."
Acorn has said its project will safeguard around 18,000 jobs in the North Sea that would otherwise have been lost, including jobs at Grangemouth.
These jobs will be needed to build pipelines to transport CO2 safely and generate low-carbon power to homes and businesses so the British people can have energy security, lower bills and protection from the climate crisis.
The funding accelerates the mission to become a clean energy superpower,