From the TUC

Regional CCS clusters needed – UK is approaching a carbon policy black hole

01 Jul 2015, by in Economics

I went to the launch of the Teesside Collective report today in London, on the case for an industrial CCS pipeline in the North East. So did a new DECC Minister (see below). The four ‘anchor’ companies leading the project are steel producer SSI, fertiliser producer GrowHow, plastics firm Lotte Chemicals UK, and hydrogen producer BOC. Last week the TUC coordinated a similar event in Leeds with 50 representatives from industry, Local Enterprise Partnerships, trade unions and other bodies. Regional CCS networks are clearly the future of industrial policy for the energy intensive industries.

DECC Minister, Lord Bourne, said at the launch: “The Teesside low carbon industrial zone goes hand in hand with the government’s vision of the Northern Powerhouse.”

He also said: “Your competitor clusters include Rotterdam,” a comment that might need demystifying – surely he meant complementary? All of Europe’s heavy industrial regions need low carbon industrial strategies suited to national needs.

The TUC’s work in support of a White Rose CCS cluster in Yorkshire and the Humber region is another UK case in point. It’s one of seven EU-funded projects led by the European TUC on low carbon industrial strategies across Europe’s manufacturing heartlands, including the Ruhr, Upper Silesia, Asturias and the port of Rotterdam.

The UK is approaching a carbon policy black hole. As Silkie blogged, the Committee on Climate Change advised government that plans to commercialise CCS and join it up with power and industrial infrastructure must be in place by June 2017. In addition, the Industrial Roadmaps for all energy intensive sectors to have been turned into action plans within just 12 months. This echoes the TUC’s feeling that we are running out of time to turn the excellent work done on industrial roadmapping into something meaningful for industrial employers, workers and investors. Carbon leakage remains a considerable threat.

Speaking at the event, Emma Pinchbeck, head of climate and energy at WWF, acknowledged that cutting carbon emissions from industry meant job losses as well as gains. “But the positive benefits from projects such as this are part of a just transition.”

The Teesside Collective summarised the economic benefits of its proposals:

  • A network, which could be operational by 2024, would see 2.8m tonnes of CO2 a year – a quarter of Teesside’s emissions – stored permanently under the North Sea.
  • The project would support 1,200 jobs during construction and help retain 5,900 in these companies and their supply chains.
  • Expansion – It is envisaged that other industries already in Teesside would later be able to plug into the network, as would new plants attracted to the area by the infrastructure.
  • Assuming modest additional upfront investment in larger pipelines, up to 15m tonnes of CO2 a year could be being stored by 2035.
  • New investment attracted by the infrastructure could create an additional 2,600 jobs in Tees Valley, £2billion Gross Value Added (GVA) and £1.2billion in extra exports by 2035.

The development of the CCS network itself would lead to an annual increase of around £85m in GVA in the UK over 2021-2024.

The FT reports that the Chancellor has apparently been stung by criticism that the Northern Powerhouse is a brand lacking substance. It will be interesting to see if next week’s Budget offers not a vision but a practical, funded roadmap for regional CCS, because as we said, CC cluster networks are clearly the future of industrial policy for the energy intensive industries