Hydrogen and CCUS get £171m in UK industrial decarbonisation strategy

The UK government has unveiled a multi-million blueprint to slash the country’s carbon industrial emissions by two-thirds in the next 15 years, writes Kelvin Ross.

It’s a hugely ambitious target and comes in the wake of Prime Minister Boris Johnson’s plan for a green industrial revolution and ahead of the UK hosting the COP26 pivotal climate talks in Glasgow later this year.

Launching the new Industrial Decarbonisation Strategy today (Wednesday), Business and Energy Secretary Kwasi Kwarteng said the UK needed to hit its climate targets “in a way that protects jobs, creates new industries and attracts inward investment without pushing emissions and business abroad”.

Kwasi Kwarteng

He added that the plans “will make a considerable dent in the amount of carbon emissions emitting from our economy and put us on the path to eliminate our contribution to climate change by 2050”.

Cutting carbon emissions from industry is mission-critical if the UK is to be seen as a genuine player in finding climate solutions. While Britain has made significant progress is curbing power generation emissions from coal plants and is a world leader in offshore wind, it continues – as does the rest of the world – to witness large emissions from the industries such as steel and cement.

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The strategy is intended to signpost to both investors and the energy sector how the government expects decarbonisation to happen, create a framework for new industrial sectors to base themselves in the UK and attract inward investment, and also future-proof businesses and jobs. It also provides cash assistance to businesses to cut their carbon footprint.

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As well as the target to cut emissions in industry, schools and hospitals by two-thirds by 2035 – and at least 90% by 2050 compared to 2018 levels – the strategy also highlights “an expectation that at least three megatons of CO2 are captured within industry per year by 2030”. Current levels of capture are minimal.

Low carbon clusters
To kick start the process, £171 million has today been allocated to nine clean energy projects to start engineering and design studies for the rollout of decarbonisation infrastructure.

The nine projects comprise initiatives that combine the development of CCUS and hydrogen to create low carbon industrial clusters in the key industrial regions of Merseyside, South Wales, Teesside, Humberside and Aberdeenshire.

Bryony Livesey, of UK Research & Innovation said the £171 million funding “is a significant step in our progress of supporting largescale decarbonisation efforts”.

“The benefits to these regional clusters will be substantial, both in terms of the environmental impact, as well as the opportunity for jobs and increasing the global competitiveness of industry in the areas.”

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James Carter, UK Head of Energy and Natural Resources at DLA Piper, said theinvestment in hydrogen hubs “is to be applauded for all the benefits it will bring to those regions and the country as a whole”.

However, he added: “This is only the start of the build back greener programme. If the UK is to meet its net-zero carbon emission goal by 2050, far greater investment will clearly be required and additional hubs will need to be established. If the UK is to play a lead role in the much discussed hydrogen revolution sustained investment, on a greater scale, over an extended period will be required.”

Luke Warren, chief executive of UK’s trade body the Carbon Capture and Storage Association, said the strategy was a significant step forward to realising the government’s target of delivering at least four low carbon clusters by 2030.

“The Industrial Decarbonisation Strategy sets out the clear role for CCUS as providing the foundations for delivering net zero in the UK. We are particularly delighted to see that funding has been allocated to CCUS clusters in all the five key industrial regions of the UK. This will be critical to meeting the UK’s target of capturing 10 million tonnes of CO2 per year by 2030 and is essential to enabling our transition to net zero.

“Ahead of COP26, the UK has today sent another strong signal to the world that it is committed to tackling climate change and becoming a world leader in this crucial technology.”

However, Warren added that alongside the already announced funding, “clarity is needed on the long-term CCUS investment framework to 2030. This will provide important visibility on the available funding, which is critical to ensuring industry confidence and deploying this sector at scale.”

Green economic recovery
Rain Newton-Smith, chief economist of business organisation the CBI, said the Industrial Decarbonisation Strategy “marks another vital step in the UK’s plans to achieve its net-zero emissions target”.

Rain Newton-Smith

“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.”

Stephen Phipson is chief executive of manufacturers’ organisation Make UK and he said a promise of financial help to decarbonise in the strategy was critical.

“Britain’s big corporations have large ring-fenced budgets for green initiatives, but our smaller firms will need support to make sure they are able to make the changes necessary to ensure the UK meets its carbon targets and that they can benefit from the dramatic changes to the way industry will work in the coming years.”

Jonathan Maxwell, chief executive of energy efficiency investment company SDCL, said the decarbonisation strategy was “a big step in the right direction to reduce carbon emissions from our industries, schools and hospitals ahead of COP26 and beyond”. 

And he added that the pandemic has also served up a debarbonisation opportunity: “COVID changes so much of the way we work, we should grasp the opportunity to think differently about how the public sector and private businesses are powered. Energy efficiency is the low hanging fruit of decarbonisation.”

The Industrial Decarbonisation Strategy comes as the UK government is embroiled in a row over its backing for a new deep coal mine – which would be the country’s first in a decade – in Cumbria, England, to provide coking coal for a steel plant.

Having initially being given a green light, opposition from the public and, more damagingly, the Climate Change Committee have forced ministers into a review.

And on the morning of the launch of the Industrial Decarbonisation Strategy, Business and Energy Secretary Kwarteng told the BBC that there were “very compelling reasons” to scrap the plans.