UK launches Industrial Decarbonisation Strategy

Net Zero Teesside and the Northern Endurance Partnership will receive over £52m for two projects that aim to decarbonise the Teesside industrial cluster in the mid-2020s.

A blueprint to deliver the world’s first low-carbon industrial sector and over £1bn to cut emissions from industry, schools and hospitals has been announced by the Business and Energy Secretary today. (17/3/21).

The new Industrial Decarbonisation Strategy sets out the government’s vision for building a competitive, greener future for the manufacturing and construction sector. Part of the government’s path to net zero by 2050, ministers claim the measures will create and support 80,000 UK jobs over the next 30 years whilst cutting emissions by two-thirds in just 15 years.

However, the £1bn does not represent new spending, but refers to already announced spending that is now being allocated to specific projects.

Ed Miliband, Labour’s shadow business secretary, said: “Once again, the government talks a big game on green but doesn’t deliver with nearly the scale or ambition that’s necessary. None of this money is new – these announcements simply allocate money already announced. Strip away the rhetoric and we see the fact that while Germany is investing 7billion euros in a hydrogen strategy our government is investing a tiny fraction of that. We need an ambitious green stimulus to support industry to decarbonise and secure jobs for the long-term, starting with a £30bn green recovery. The government has failed to deliver yet again.”

To kick start the process, £171m from the Industrial Decarbonisation Challenge has been allocated to nine green tech projects in Scotland, South Wales and North West, Humber and Teesside in England, to undertake engineering and design studies for the rollout of decarbonisation infrastructure, such as carbon capture, usage and storage (CCUS) and hydrogen.

To reduce carbon emissions from public buildings including hospitals, schools and council buildings, £932m has been directed to 429 projects across England. The Public Sector Decarbonisation Scheme funds low carbon heating systems, such as heat pumps, and energy efficiency measures like insulation and LED lighting.

Business and energy secretary Kwasi Kwarteng said: “The Industrial Decarbonisation Strategy will send a clear signal to the market by setting out how the government expects decarbonisation to happen, while improving investor confidence to unleash the private capital necessary to reach net zero by 2050. In the process, the government will create the right framework for new industrial sectors to base themselves in the UK and attract inward investment, while future-proofing businesses to secure the long-term viability of jobs in our industrial heartlands.”

CBI chief economist Rain Newton-Smith said: “The Industrial Decarbonisation Strategy marks another vital step in the UK’s plans to achieve its net-zero emissions target. Creating and championing competitive low-carbon industries will ensure the benefits of a green economic recovery, and the longer-term transition to net-zero, are shared across the whole country. Ahead of COP26, this is a welcome demonstration of the UK’s commitment to act on climate change, to make our post-pandemic recovery a green one, and to give businesses the certainty they need to invest in the technologies of the future.”

Projects supported by the £171m Industrial Decarbonisation Fund include:

North West (Merseyside): Hydrogen energy and carbon capture, usage and storage (CCUS) project HyNet North West will receive almost £33m funding for two projects that aim to transform the North West of England into a low carbon industrial cluster by 2030 – including Liverpool, Greater Manchester, Cheshire and North Wales. Two projects will look to decarbonise industry by directly capturing and storing emissions, creating a hydrogen economy across the North West, this includes repurposing old oil and gas facilities for carbon transport and storage. The projects will reduce carbon dioxide emissions by 1 million tonnes per year from 2025, rising to up to 10 million tonnes per year from 2030 and beyond, the equivalent of taking 4 million cars off the road. HyNet North West will provide green energy for local homes and businesses – a blend of hydrogen and natural gas.

Scotland (St Fergus, Aberdeenshire): Over £31m for Scotland’s Net Zero Infrastructure project will fund important offshore and onshore engineering studies connecting industrial sites across East Scotland with access to world-class, safe carbon storage resources in rock deep below the North Sea. This programme of new work and reusing infrastructure will provide a significant boost to the region’s fast-growing low carbon credentials, paving the way for onshore and offshore developments totalling in excess of £3bn, helping Scotland transition away from oil and gas, creating and securing tens of thousands of jobs by 2050.

Teesside: Net Zero Teesside and the Northern Endurance Partnership will receive over £52m for two projects that aim to decarbonise the Teesside industrial cluster in the mid-2020s. The projects aim to use the funding for a world-first flexible gas power plant that uses carbon capture, usage and storage and that complements renewable energy, and to create an offshore CO2 transport and storage system. Together the projects could capture around 2 million tonnes of CO2 annually from 2026, decarbonise 750MW of power and reduce the region’s industrial emissions by a third. As a result of the government funding, the projects could create £450m in economic benefits and create up to 5,500 direct jobs.

Humber: Over £21m for the Zero Carbon Humber Partnership project which aims to turn the Humber region into a net zero cluster by 2040. This project’s vision is to deliver H2H Saltend, one of the world’s first at-scale low carbon hydrogen production plants on the north bank of the Humber, and CO2 and hydrogen pipelines enabling industrial sites and power stations across the Humber to switch to hydrogen and/or capture and transport their emissions.

South Wales: Nearly £20m will go to the South Wales Industrial Cluster which aims to create a net zero industrial zone from Pembrokeshire to the Welsh/English border by 2040, which will open up opportunities for South Wales to become a leader in decarbonised industrial and economic growth. The project will look at options to support the deployment of hydrogen across regions and to develop carbon capture, usage and storage. South Wales industry produces nearly 9 million tonnes of carbon each year – 12% of UK’s industry’s total. The project will therefore create a sustainable plan for the region, through the production and distribution of hydrogen, cleaner electricity production using carbon capture and/or hydrogen-rich natural gas and large industry decarbonisation through fuel switching and the production of cleaner transportation fuels.

Click here to download the full Industrial Decarbonisation Strategy.

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