UK Pledges Cash for Zero-Carbon Industry Hub

The UK told the COP24 climate summit that it will provide new funding up to £170mn ($214mn) to co-develop the world's first 'net-zero carbon' cluster of heavy industry by 2040.

Its December 13 statement did not say where, but candidate areas include Grangemouth, South Wales, Merseyside, Teesside, Humberside and Southampton (see graphic below).

A task force set up by the government – including industry and experts – identified in July 2018 a handful of candidate industrial areas including Teesside or Merseyside (in England), South Wales, and Grangemouth (Scotland) in a report entitled Delivering Clean Growth, adding that investment in a project at Teesside in northeast England could cost £34bn 'but bring societal benefits of £160bn'.

In November an international producers group OGCI Climate Investments – with support from five large oil companies – also said it was ready to progress the UK's first commercial full-chain carbon capture, use and storage (CCUS) project in Teesside.

Announcing the "up to £170mn" state funding December 13, UK energy and clean growth minister, Claire Perry, said in Katowice that the UK’s low carbon economy has the potential to deliver export sales of low carbon goods and services around the world, by 2030 annual exports could be worth up to £170bn, and could support up to 2 million 'green collar' jobs by 2030.

However, a lot remains to be decided between then and now, with almost all the multi-billion investments expected from companies, which therefore require fiscal incentives that are not yet in place. Last month for instance, three gas companies published a blueprint to convert 3.7mn homes from gas to hydrogen by 2034 but this requires $29bn of investment, not least in a huge hydrogen production plant that would require an equally huge carbon capture and storage project.

Perry also told COP24 that the UK would provide a £20mn boost to a World Bank programme to help developing countries move away from coal power.

The (up to) £170mn state funding for industry would be provided through a competitive process for clusters to research, develop and demonstrate at scale the innovative solutions to lead the way to a decarbonised industrial future, the government said; both the £170mn Decarbonising Industry and a £66mn Transforming Foundation Industry investment depend on industry entering into partnership with government and providing significant co-investment to this challenge.

Graphic credit: UK government's Business, Energy and Industrial Strategy department