An ambitious blueprint to deliver the world’s first low-carbon industrial sector and over £1 billion to cut emissions from industry, schools and hospitals has been announced by the Business and Energy Secretary today (Wednesday 17 March).
Building on the Prime Minister’s 10 Point Plan for a Green Industrial Revolution published last year, 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, today’s measures will create and support 80,000 UK jobs over the next 30 years whilst cutting emissions by two-thirds in just 15 years.
The new strategy will be underpinned by supporting existing industry to decarbonise and encouraging the growth of new, low carbon industries in the UK to protect and create skilled jobs and businesses in the UK, as well as giving businesses long-term certainty to invest in home-grown decarbonisation technology, such as that which can capture and store carbon emissions from industrial plants – rather than outsourcing industrial activity to high-emission countries around the world.
The blueprint also includes measures to build on the UK’s leading efforts in moving towards greener energy sources, with an expectation of 20 terawatt hours of the UK industry’s energy supply switching from fossil fuel sources to low carbon alternatives by 2030 – helping industry to increase its use of low carbon energy sources to around 40% of industry’s total energy consumption.
To kick start the process, £171 million 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, £932 million 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.
The government say it will also introduce new rules on measuring the energy and carbon performance of the UK’s largest commercial and industrial buildings, including office blocks and factories, in England and Wales. The move could provide potential savings to businesses of around £2 billion per year in energy costs in 2030 and aim to reduce annual carbon emissions by over two million tonnes – approximately 10% of the current emissions from commercial and industrial buildings, the equivalent to removing emissions from a town the size of Doncaster.
Business and Energy Secretary Kwasi Kwarteng said:
The government say the Industrial Decarbonisation Strategy will send a clear signal to the market by setting out how they expect decarbonisation to happen, while improving investor confidence to unleash the private capital necessary to reach net zero by 2050. In the process, the government say they 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.
Other key commitments within the Strategy include:
- to use carbon pricing as tool for getting industry to take account of their emissions in business and investment decisions
- to establish the right policy framework to ensure uptake of fuel switching in industry from fossil fuels to low carbon alternatives such as hydrogen, electricity or biomass
- to establish a targeted approach to mitigate against carbon leakage that meets the government’s domestic and global climate goals, while keeping businesses competitive
- to develop proposals for new product standards, enabling manufacturers to clearly distinguish their products from high carbon competitors
- to explore the role of coordinated action on public procurement to create demand for green industrial products, helping to drive down costs and allowing a broader market to develop
- use the government’s Infrastructure Delivery Taskforce, named ‘Project Speed’, to ensure the land planning regime is fit for building low carbon infrastructure
- to work with the recently re-constituted Steel Council to consider the implications of the recommendation of the Climate Change Committee to ‘set targets for ore-based steelmaking to reach near-zero emissions by 2035’
- support the skills transition so that the current and future workforce benefit from the creation of new green jobs
- an expectation that industrial emissions will fall by two-thirds by 2035, and by at least 90% by 2050, compared to 2018 levels
- an expectation that at least 3 megatons of CO2 is captured within industry per year by 2030, compared to minimal levels at present
CBI Chief Economist Rain Newton-Smith added:
The areas receiving £932 million government investment through the Public Sector Decarbonisation Scheme (PSDS) in England include:
- £78,236,986 for Greater Manchester Combined Authority to decarbonise 15 bodies of the Greater Manchester public estate, including Transport for Greater Manchester, Greater Manchester Fire and Rescue Service, Greater Manchester Police, the Royal Northern College of Music, and various Greater Manchester community buildings, including 36 schools and 22 leisure centres. The buildings will get extensive green upgrades, including new air source heat pumps, solar panels to generate and create their own electricity and new lighting systems
- £24,253,008 for Leicester City Council to upgrade 93 buildings including 56 schools. This will include replacing natural gas heating with air source heat pumps, installing LED lighting, installing solar panels, and improving the insulation of the buildings
- £24,007,737 for Hertfordshire County Council to upgrade 182 council buildings, including 74 schools and 23 emergency service buildings. This will include the installation of heat pumps, battery storage and solar panels and improving the energy efficiency of the buildings through installing double glazing and cavity wall insulation
- £12,640,760 for Hull University Teaching Hospitals NHS Trust to install solar panels, heat pumps and new roof insulation. Also planned are mass replacement of lighting to greener LED units, replacing inefficient air compressors, and a new supply point to Castle Hill Hospital
Projects – £171 million Industrial Decarbonisation Fund
North West (Merseyside)
Hydrogen energy and carbon capture, usage and storage (CCUS) project HyNet North West will receive almost £33 million 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 one million tonnes per year from 2025, rising to up to ten million tonnes per year from 2030 and beyond, the equivalent of taking four million cars off the road. HyNet North West will provide green energy for local homes and businesses – a blend of hydrogen and natural gas.
As a result of government funding, HyNet North West aims to create thousands of new jobs in the North West by 2025, while protecting and retaining skilled jobs, attracting new talent and providing learning, training and upskilling opportunities.
Scotland (St Fergus, Aberdeenshire)
Over £31 million 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 £3 billion, helping Scotland transition away from oil and gas, creating and securing tens of thousands of jobs by 2050.
Net Zero Teesside and the Northern Endurance Partnership will receive over £52 million 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 two 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 £450 million in economic benefits and create up to 5,500 direct jobs.
Over £21 million 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.
A further over £12 million will be awarded to project Humber Zero which plans to decarbonise the industrial complex at Immingham, North East Lincolnshire, by creating a carbon capture and hydrogen hub, providing cost-effective and low carbon energy supply and storage opportunities to industry and the National Grid.
With the Humber region creating 40% of the UK’s industrial emissions, these projects aim to capture 25 million tonnes of carbon every year. It will create a low-carbon hydrogen energy supply chain to power the region’s homes and businesses, while safeguarding tens of thousands of jobs.
Nearly £20 million 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 nine 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.