NWF investment supports cement and lime production carbon capture

The National Wealth Fund has announced a £28.6m equity investment in Peak Cluster, a project to build a carbon dioxide transport pipeline from cement and lime plants in the Peak District to Morecombe Net Zero’s (MNZ) carbon storage site beneath the Irish Sea.

Peak Cluster is a collaboration of four cement and lime plants in and around the Peak District owned by Tarmac, Breedon, SigmaRoc and Holcim, that collectively account for 40% of the country’s production of cement and lime.

Cement and lime are two of the hardest industrial sectors to decarbonise due to the high levels of CO2 emissions generated in the manufacturing process, which cannot be abated through transitioning to low carbon fuels.

The National Wealth Fund investment is the cornerstone of a £59.6m equity raise, which also includes investment through a joint venture vehicle between Summit Energy Evolution (part of Sumitomo Corporation) and Progressive Energy Peak, together with the Peak Cluster cement and lime producers.

Once constructed, the Peak Cluster pipeline will be the heart of a full value chain Carbon Capture and Storage (CCS) network. Spirit Energy is currently converting its Morecambe gas fields in the East Irish Sea to create the UK’s biggest carbon dioxide store.

By investing alongside industry, supporting early development risk reduction and providing the critical financing for Peak Cluster through its development consent process, the National Wealth Fund will remove some of the barriers for private investment to further develop and construct the project in the future.

With CCS one of the five priority sectors announced by Chancellor Rachel Reeves, the National Wealth Fund has an important role to play in helping amplify government policy, de-risk and accelerate the financing and delivery of these vital projects.

Chancellor of the Exchequer, Rachel Reeves, said, “The National Wealth Fund is a force for growth, investing £3 billion into the British economy and securing 12,500 jobs. We're modernising the cement and lime industry, delivering vital carbon capture infrastructure and creating jobs across Derbyshire, Staffordshire and the North West."

John Flint, chief exectutive of the National Wealth Fund said, “Substantial private investment, deployed at risk, will be needed to develop and deliver carbon capture projects across the UK. Capital must be committed now, especially in hard to abate sectors such as cement and lime, to ensure a pipeline of projects is ready for deployment and the UK is able to meet its ambitious carbon capture targets.

“The NWF has played a key role in structuring the transaction to crowd in private sector co-investment while taking early development risk to catalyse future investment. Our involvement demonstrates how we can use our risk capital to solve problems and manage investment uncertainty, amplifying government policy and ultimately removing the barriers for private investors to support this project.”

John Egan, chief executive of Peak Cluster said, “Peak Cluster is focused on securing a sustainable future for the cement and lime industry. Together with MNZ, the UK’s biggest carbon store, we will capture, transport and store CO₂ to support industry to thrive in a low carbon future.

“Through the National Wealth Fund, Government will support the development of essential infrastructure to secure good jobs with good wages, produce sought-after low carbon products here in Britain, grow the UK’s supply chain and skills base, secure private investment and lead the global low carbon technology sector.  Peak Cluster, in partnership with MNZ, ticks every one of these boxes.”

Centrica Group Chief Executive and Chair of Spirit Energy, Chris O’Shea, said, "This landmark first investment in carbon capture by the National Wealth Fund is an important and exciting step forward for the UK’s net zero ambitions, and our plans for Morecambe specifically. By transforming the Morecambe gas fields into the UK’s largest carbon store, Spirit Energy will provide the critical infrastructure needed to decarbonise hard-to-abate industries like cement and lime.

The support of the National Wealth Fund, alongside private sector investment, demonstrates the strength of our collective commitment to a low-carbon future—securing jobs and growth, decarbonising industry, and delivering real progress on emissions reduction."

Dr Diana Casey, executive director, energy and climate change, cement and lime at Mineral Products Association said, “Around 40% of all the UK’s vital cement and lime comes from the Peak District. However, cement is responsible for 7.5% of all human-made CO₂ emissions globally and is not a sector which can be easily decarbonised. If our industry, and the jobs which rely on it, are to survive, and thrive into the future, we must implement carbon capture and storage without delay.”

Olivia Powis, CEO of the Carbon Capture and Storage Association said, “The National Wealth Fund’s significant equity investment of £28.6m in the Peak Cluster is fantastic news for the future of the cement and lime industry in the UK. Transitioning industries to low-carbon operations is vital for their long-term viability and competitiveness in the UK.”