Strategy for decarbonising industry released by UK Government

THE UK Government has released its Industrial Decarbonisation Strategy, outlining its plans to reduce emissions from heavy-carbon industries in line with the net zero by 2050 target.

The Government has recently been criticised over its slow progress in detailing exactly how it will reach net zero emissions by 2050, and was also called out on its inconsistent messages on green policies, as well as insufficient funding. It has now released the Industrial Decarbonisation Strategy which sets the target of reducing industrial emissions by two thirds by 2035 and 90% by 2050 compared to 2018 levels, to reach the net zero target. Emissions from industry are responsible for 16% of the total UK emissions. However, the Climate Change Committee (CCC) – the independent body that advises the UK Government on climate policy – has recommended a reduction target of 70% by 2035 and 90% by 2040 compared to 2018 levels.

The strategy aims to have 20 TWh/y of low-carbon power in industry by 2030, with fuels such as hydrogen, bioenergy, and clean electricity replacing fossil fuels. It anticipates that low-carbon or green hydrogen used as a fuel could be consumed at a rate of 10–16 TWh/y by 2030. This could rise to 86 TWh by 2050 if there is widespread access to hydrogen. Further details will appear in the Hydrogen Strategy, due to be published later this year. 

It also says that 3m t/y of CO₂ will be captured from industry by 2030, rising to 8–14m t/y by 2050. This is in contrast with the target of 10m t/y of CO₂ captured by 2030 as set out in the Ten Point Plan for a Green Industrial Revolution. However, according to Business Green, a Government spokesperson said that the remaining 7m t/y would be captured in other sectors such as power plants. The Government has previously committed funding for the CCUS Infrastructure Fund which will support the development of four low-carbon clusters by 2030, and at least one net zero cluster by 2040.

Funding allocated for CCUS and hydrogen clusters

The £1bn (US$1.4bn) announced along with the strategy is actually funding that has previously been announced, but has now been allocated. This includes the £171m of the UKRI’s Industrial Decarbonisation Challenge – initially announced in 2019 – which has now been allocated to carbon capture, utilisation and storage (CCUS) and hydrogen industrial decarbonisation projects across five industrial clusters:

• HyNet North West will receive £33m for two projects working to create a low-carbon industrial cluster in the North West of England by 2030 through the use of CCUS and hydrogen.
• Scotland's Net Zero Infrastructure project will receive £31m for offshore and engineering studies on CO₂ storage below the North Sea.
• Net Zero Teesside consortium and the Northern Endurance Partnership will receive £52m for two projects aiming to decarbonise the Teesside industrial cluster in the mid-2020s.
• The Zero Carbon Humber Partnership will receive £21m and Humber Zero will receive £12m to create a net zero cluster in the region by 2040 as well as decarbonise the industrial complex at Immingham.
• The South Wales Industrial Cluster will receive £20m to create a net zero industrial zone.

Luke Warren, Chief Executive of the Carbon Capture and Storage Association (CCSA), said: “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 10m t/y of CO₂ by 2030 and is essential to enabling our transition to net zero.”

“Alongside the funding announced today, 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.”

The strategy models two potential decarbonisation scenarios: national networks where CCUS and hydrogen are deployed nationwide, and cluster networks where the technology is confined to within 25 km of an industrial cluster. The UK’s six industrial clusters – located in Grangemouth, Teesside, Humberside, Southampton, South Wales, and Merseyside – account for around half of industrial emissions. It notes that the cluster networks scenario does not reduce emissions as much as the national networks scenario, with cluster networks accounting for an extra 7 m t CO₂e by 2050. Residual emissions would still occur under both scenarios, which would need to be offset through greenhouse gas removal measures.

The strategy also says that the Government plans to implement business models for CCUS and hydrogen based on the Contracts for Difference model – which was successful in lowering the costs of offshore wind – to help lower the costs of CCUS technologies by driving private sector investment. It plans to finalise the business model for industrial carbon capture this year and implement it in 2022.

Decarbonising the steel and cement industries

The CCC has recommended that the Government set a target for ore-based steelmaking to reach near-zero emissions by 2035, and cement production to reach near-zero emissions by 2040. The strategy has not set either of these targets, instead saying that it will “consider the implications” of the CCC’s recommendation for steel. Steel production in the UK is responsible for around 15% of industrial emissions and cement production is responsible for around 6%.

The strategy does note that decarbonising the two blast furnace sites at Port Talbot and Scunthorpe, along with the wider steel sector, will be essential. However, it says that it would take a “technology neutral” approach and therefore won’t rule out the continued use of coking coal along with CCUS. It is developing a £250m clean steel fund but this fund is not expected to be released until 2023. The fund aims to support new technologies for lower-carbon steel production.

The Government says it will work with the cement sector to explore decarbonisation options. It notes that cement production sites in the UK aren’t near industrial clusters, making it more difficult to implement CCUS. It will work with the minerals industry to consider options for these dispersed sites. It says it will support advancements in product innovation such as alternative cements.

The strategy also aims to support the just transition as the low-carbon industrial sector grows. It aims to ensure that local workers are supported in transitioning form high-carbon to low-carbon jobs and will also ensure that businesses can appropriately upskill and retrain staff.

Nilay Shah, FIChemE and Vice-Chair of the National Engineering Policy Centre Net Zero working group, said: “It is essential that all sectors of industry are fully involved in the drive towards decarbonisation and [this] roadmap provides helpful targets and aspirations across the whole energy system. Low-regrets measures such as reducing energy demand and improving efficiency in transport and supply chains will help to reduce future costs and also have positive social and economic benefits. However, we must not underestimate the sheer enormity of the engineering challenge facing us, not least in upskilling the workforce. This includes long-term jobs in major infrastructure projects for power generation, CCUS and hydrogen as well as ensuring that the education young people are receiving today will properly equip them to contribute to decarbonisation in the future.”