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Carbon capture, usage, and storage: What is the potential impact on UK construction?

CCUS: What UK construction companies need to know about carbon capture, usage and storage.

14/09/2026 · 7 minute read

Up to 95 per cent of construction sector emissions eliminated within a decade? How would that work? In their bid to decarbonise, industry leaders are sharpening their focus on carbon capture, usage, and storage (CCUS). How could your company capitalise on this potential game-changer?

 

2050. The UK’s net zero deadline might be a comfortable-sounding quarter of a century away, but leading construction companies are aware of the scale of the challenge ahead. They are therefore not wasting any time and have begun the decarbonisation process.

Materials such as lower carbon concretes are entering mainstream use, while circular economy methods and materials are making their mark. However, despite solid progress, the sector still has some way to go to make a significant difference in its carbon emissions.

The industry’s most difficult-to-manage CO2 emissions are linked to concrete, steel, and lime production. There are a number of technical solutions, such as electrification or fuel switching. But these are expensive and do not totally solve the problem.

Carbon offsetting (such as buying carbon credits or directly funding reforestation schemes) provides another option. However, this comes with a range of inherent challenges. As a result, frontrunners are turning their attention to the technology that is the focus of this paper — carbon capture, usage, and storage (CCUS).

In 2024, CCUS received a significant boost when the UK government committed billions in capital funding. Since then, confidence in its effectiveness has been growing. Now, a remarkable 84% of UK construction stakeholders say that CCUS is likely to become an established industry in its own right within the next ten years.

Overall, it is clear that CCUS has the potential to hone the competitive edge of contractors, developers, and other stakeholders in the construction sector.

What is CCUS, and how does it compare to carbon offsetting?

CCUS is a way to decarbonise supply chains and meet net zero targets by 2050. One of its key positives is that it does not require immediate, costly changes to core production technology or operations. Instead, the technology intercepts CO2 from heavy industries (such as cement or steel) after it has been produced and before it enters the atmosphere.

Gas emissions are compressed and either incorporated into building materials or permanently sequestered in rock formations (e.g., deep beneath the seabed). Experts see CCUS as a future-proof alternative that decarbonises supply chains directly.

Key CCUS benefits include:

CCUS tackles the emission source directly. Companies avoid paying for external offsets. CCUS could therefore potentially eliminate exposure to fluctuating carbon credit markets. 

Some emissions cannot be eliminated through electrification or fuel switching alone. For example, 50% of cement CO2 emissions are from chemical process emissions (calcination) that release CO2 from limestone. This is an unavoidable consequence of cement and lime production. CCUS deals with these emissions.

The manufacture and sale of low-carbon products enables CCUS to reduce emissions in a cost-competitive way.

Using captured CO2 for carbon-cured aggregates or low-carbon cement will help secure your projects against tightening regulatory standards. This is vital as the UK Government is pushing toward strict net zero targets.

In comparison, carbon offsetting (although a more mature decarbonisation option) carries volatile price risks, and an uncertain return on investment. In addition, greenwashing scrutiny of the approach is mounting, carrying the threat of reputational damage.

Status update: How advanced is the UK CCUS pipeline?

In Britain, the CCUS pipeline is accelerating. It is being driven by two major industrial clusters, in Teesside and Merseyside. Public funding is also kickstarting the industry, with the government allocating up to £21.7 billion over 25 years.

This has been boosted by an additional £5.8 billion from the National Wealth Fund, which is intended to unlock an estimated £8 billion in immediate private investment, and secure broader commercial finance.

The potential on offer is shown by developments underway at the Padeswood cement plant in North Wales, where Heidelberg Materials is establishing Padeswood CCS. This is the UK’s first full-scale carbon capture facility. Once operational, it will capture about 800,000 tonnes of CO2 annually, eliminating about 95% of the plant’s emissions.

For construction companies utilising this supply, it represents a huge step in shrinking embodied carbon profiles without compromising structural integrity. Indeed, such developments could transform the construction materials sector.

CCUS adoption: How clued up is your company?

To maintain their competitive edge, UK construction companies must develop a robust understanding of the CCUS ecosystem and respond to the opportunities it provides. It is particularly important to develop an in-depth knowledge of risk mitigation in this sphere.

While companies do not need to embrace CCUS immediately, failure to plan could result in costly retrofits, supply chain bottlenecks, or increasing reliance on other options that might not be as effective. All of these factors could create inefficiencies and unwanted ongoing costs.

Right now, strategic awareness means understanding how CCUS integrates into the UK’s broader net zero strategy, specifically in relation to energy-intensive materials such as cement and steel.

It could also be useful to track the progress of the East Coast and HyNet industrial clusters. This will ensure that you keep up with developments in the manufacture of low-carbon materials and know where to source them from.

During the next 10 to 15 years, companies could engage productively in the development of CCUS by:

  • Prioritising low-carbon procurement from suppliers utilising CCUS technologies.
  • Exploring carbon utilisation, such as using building materials made with sequestered CO2.
  • Aligning risk management frameworks with emerging BREEAM and UKGBC sustainability guidelines.

Core benefits of CCUS for the UK construction sector

Carbon capture, usage, and storage could be a hero technology for construction firms. This is because it has the potential to transform the 2050 net zero target from a regulatory headache into a competitive advantage. It reduces embodied carbon directly, should help companies win major government tenders, and will help future-proof supply chains against rising carbon taxes.

Unlocking supply chain advantages

For the UK construction industry, carbon capture has the potential to affect every stage of the industrial emissions hierarchy:

selected option

Industrial infrastructure companies operating heavy plant and machinery can capture direct emissions at source, preventing them from entering the atmosphere.

By supporting the development of low-carbon hydrogen and zero-emissions electricity from CCUS-enabled power clusters, developers can significantly lower the carbon footprint of their site operations.

CCUS allows suppliers to create ultra-low carbon building materials, slashing the embodied carbon of entire supply chains. Meeting stringent low-carbon building codes, such as the UK’s Future Homes Standard, is easier when such building materials are used. This approach attracts green-focused institutional investors and buyers.

For UK contractors, demonstrating proactive carbon reduction across all three scopes creates a significant competitive advantage. Plus it satisfies the strict environmental, social, and governance (ESG) criteria required to win public infrastructure contracts and major private tenders.

In addition, manufacturers who integrate CCUS into their production processes future-proof themselves against rising Carbon Border Adjustment Mechanisms (CBAM) and UK Emissions Trading Scheme costs.

CCUS risks and insurance mitigation

It should be acknowledged that integrating CCUS into the UK industry exposes supply chains to a number of challenging risks. These include:

  • Technology underperformance
  • Failure modes such as corrosion
  • Business interruptions if a plant outage halts CO2 removal

Extended plant downtimes can also cause costly tax credit invalidations and carbon offset devaluations.

It is possible to help mitigate these exposures with rigorous risk engineering and robust subcontractor vetting. However, given the infancy of the CCUS industry, technology suppliers are likely to be reluctant to provide technology performance guarantees. As a result, developers should investigate bespoke construction insurance solutions.

Standard insurance policies are available to cover delay in start-up (DSU) and limited (physical damage only) contingent business interruption. More bespoke products, such as leakage remediation, and carbon offset invalidation, are available. However, they may need tailoring to ensure project bankability.

How to proceed

Awareness of CCUS is increasing exponentially. However, UK construction supply chains need to get up to speed with key challenges, including unproven technology risks, long-term liabilities, and fluctuating carbon credit penalties.

Engaging with an experienced construction insurance broker will help to bridge this gap, as the broker will be able to provide crucial advice on performance guarantees, leakage liabilities, and business interruption considerations.

To choose the right specialty broker, select one with dedicated and verifiable energy transition expertise, bespoke underwriting access, and a proven track record in appropriate risk transfer on relevant CCUS projects across the globe. 

Our people

Vlad Vorobet

Vlad Vorobet

Energy Transition Growth Leader

  • United Kingdom

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