Appendix HyNet, one of the UK’s flagship low-carbon industrial clusters, is pioneering the integrated deployment of carbon capture, T&S and future hydrogen production in Northwest England and North Wales. Its innovative financing journey highlights key mechanisms and market/ government dynamics required to scale up investment to decarbonize a wide range of industrial activities, particularly in hard-to-abate sectors. HyNet was one of two UK clusters chosen under Track 1.45 Track 1 refers to the initial group of two industrial decarbonization clusters that were selected by the UK government for early support and fast-track development of low- carbon technologies. These clusters receive priority access to funding and policy mechanisms to accelerate project deployment. The UK Government has committed to allocating £21.7 billion over 25 years for CCS and projects in the first two Track 1 clusters. HyNet cluster will house one of the UK’s first large-scale blue hydrogen plants (EET Hydrogen at Stanlow) and aims to capture up to 10 million tonnes of CO2 annually by the 2030s.46 Project structure and regulatory context The UK’s regulated model, through the economic licence and supporting government packages, has been the central incentive driver, particularly for infrastructure development. The T&S scheme operates as a regulated entity under the Office of Gas and Electricity Markets’ oversight and a binding “network code”, which sets technical and commercial entry terms for users (i.e. emitters). The economic licence gives Eni, as HyNet’s T&S operator, formal authorization to develop, own and operate the T&S network. While Eni acts as a system operator, all entry and revenue agreements remain subject to government determination and ongoing regulatory review. However, in the early stages of development, Eni’s leadership allowed the consortium of organizations to present a robust “cluster” narrative, pairing a credible operator (Eni) with a pipeline of capture projects to assure the government and solidify Track 1 CCUS status. Financing sources and structures Eni reached final investment decision (FID) in April 2025, securing a £2.5 billion package from a syndicate of more than 20 commercial banks for T&S infrastructure. Commercial interest was so abundant, including from Crédit Agricole, Mizuho and Standard Chartered, that alternative options from development banks and infrastructure funds were unnecessary. The anchor for bankability was a robust economic licence and a revenue support agreement with the government’s Low Carbon Contracts Company (LCCC). LCCC, a government- owned entity, is the independent counterparty to support low-carbon energy projects.47 In the context of HyNet, LCCC guarantees a minimum level of revenue regardless of the level of CO2 captured or stored in initial ramp-up years. This insulates investors against low initial utilization, guaranteeing “allowed revenue” while capture projects ramp up. Having reached FID on the T&S network in April 2025, two carbon capture plants (Heidelberg’s Padeswood cement manufacturing plant and Encylis-Protos’ waste-to-energy facility) reached FID in September 2025. Additional detail and context on the four case studies HyNet North West From Blueprint to Reality: A Stronger Business Case for Shared Energy Infrastructure 37

From Blueprint to Reality 2026