UK government lays out blueprint for industrial decarbonisation

The blueprint expands on the '10-point plan for a Green Industrial Revolution', which the government published last year as its first step towards meeting its legal obligation to reach net-zero carbon emissions by 2050. The plan was criticised for largely repackaging previous commitments, with Shadow Business Secretary Ed Miliband stating that the new funding does not “remotely” meet the scale of the climate and employment challenges.

The government states that its strategy will create and support 80,000 new jobs over the next three decades while cutting carbon emissions by two-thirds in 15 years.

The strategy is based on supporting existing industry to decarbonise (e.g. giving businesses long-term certainty to invest in technologies such as carbon capture and storage) while encouraging the growth of new low-carbon industries in the UK for skilled job creation. The government says it intends to prevent the outsourcing of industrial activity to other countries, shifting the burden of emissions reduction elsewhere.

The strategy also emphasises the transition to greener energy sources. It anticipates that 20TWh of the UK’s industry energy supply could switch from fossil fuel sources to low-carbon alternatives by 2030 (increasing low-carbon energy sources to providing 40 per cent of industry’s total energy consumption).

“We were the first major economy to put into law our target to end our contribution to climate change, and today we’re taking steps to be the first major economy to have its own low-carbon industrial sector,” said business secretary Kwasi Kwarteng. “While reaching our climate targets will require extensive change across our economy, we must do so in a way that protects jobs, creates new industries and attracts inward investment, without pushing emissions and businesses abroad.

“Ahead of COP26, the UK is showing the world how we can cut emissions, create jobs and unleash private investment and economic growth. Today’s strategy builds on this winning formula as we transition to low-carbon and renewable energy sources while supporting the competitiveness of Britain’s industrial base. Backed by more than £1bn investment, today’s plans will make a considerable dent in the amount of carbon emissions emitting from our economy and puts us on the path to eliminate our contribution to climate change by 2050.”

The strategy details the allocation of £1bn in funding announced last year.

£171m in funding has been allocated to nine green engineering projects: in Merseyside the HyNet North West project will be supported in turning the region into a low-carbon industrial cluster through hydrogen and carbon capture; in Aberdeenshire, funding will go towards offshore and onshore engineering studies connecting industrial sites with carbon sequestration sites below the North Sea; in Teesside, funding will go towards a project to create a flexible gas power plant which uses carbon capture and an offshore carbon transport and storage system; in Humber, a project aiming to turn the industry-heavy region into a net-zero cluster by 2040 through the delivery of one of the first low-carbon hydrogen production plants; and in South Wales, the government will back a project to create a net-zero industrial zone stretching from Pembrokeshire to the Welsh border with a focus on carbon capture and hydrogen.

A further £932m has been allocated to 429 projects in England for reduction of carbon emissions from public buildings, including hospitals, schools, and council buildings through the installation of low-carbon heating systems such as heat pumps and LED lighting.

The government will also introduce new rules for measuring the performance of the UK’s largest commercial and industrial buildings, such as office blocks and factories, according to energy efficiency and carbon emission metrics. The government hopes that this could provide energy savings to businesses of around £2bn per year in 2030.

Other aspects of the strategy include developing proposals for new products standards which enable manufacturers to distinguish their products from high-carbon competitors; establishing a framework for ensuring uptake of fuel switching in industry to low-carbon choices such as hydrogen or biomass; and setting out a targeted approach to carbon leakage which meets the government’s climate goals.

The strategy was welcomed with the CBI, with chief economist Rain Newton-Smith commenting: “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.”

Bryony Livesay, UKRI director for the industrial decarbonisation challenge, added: “The announcement of £171m funding is a significant step in our progress of supporting large-scale decarbonisation efforts, and we are looking forward to working alongside the projects as they put their revolutionary plans into action […] it once again demonstrates the UK’s industry as being at the forefront of innovation and creating greener solutions for the future.”

However, the opposition and environmental groups have criticised the strategy for failing to meet the scale of the decarbonisation challenge and for failing to direct funding towards the most responsible projects.

“This announcement still contains handouts for the fossil fuel industry,” said Mike Childs, head of science at Friends of the Earth. “Public money will pay for carbon capture and storage for gas-fired power stations and the production of dirty hydrogen from natural gas. Fossil fuel use can never be green because carbon capture and storage only captures some of the carbon emissions and there are still methane leaks when gas is extracted. No ifs or buts, there should be zero support for climate-wrecking fossil fuels.”

Dr Doug Parr, chief scientist of Greenpeace UK, commented: “It’s important that the government takes a proper look at decarbonising industry but it has focused on propping up business as usual by bolting carbon capture technologies onto fossil-fuel-based industries rather than exploring a range of routes to zero emissions. There may be a few areas where this looks like the only option, but to rely on it as an overarching strategy for industry is risky. We are putting all of our eggs in the carbon capture and storage basket, and no one who understands the problems it has encountered on costs and performance can say with confidence that it will deliver.”

Miliband added: “Once again, the government talks a big game on green but doesn’t deliver with early the scale or ambition that’s necessary. None of this money is new – these announcements simply allocate money already announced.”