The UK government has committed to a 78% reduction in greenhouse gas emissions by 2035 compared to 1990 levels in pursuit of its net zero goals. To date, a centrally orchestrated transition away from coal-fired power generation has delivered the bulk of emissions reductions. However, as the Climate Change Committee’s Sixth Carbon Budget highlights, this process is almost complete. Future cuts in emissions will require a rapid transition to low carbon options across all sectors of the economy, including transport, buildings, agriculture, and industrial manufacturing. UKERC’s Economic and Industrial Transitions project focusses on this last sector and seeks to understand how the local context will shape the processes of industrial decarbonisation.
UK industry incorporates a wide variety of subsectors including metals and minerals, chemicals, food and drink, paper and pulp, ceramics, glass and oil refineries. In total, they account for 16% of national greenhouse gas emissions and provide 2.6 million direct jobs. Decarbonising industry, therefore, will be a vital component of reaching net zero with potential consequences for millions of people. We already know there is no one-size-fits-all approach to this task. Just as the subsectors vary, so will their decarbonisation pathways, dictated by the demands of their industry.
Recognising this complexity, the Government’s Industrial Decarbonisation Strategy sets out a range of technical options. These include fuel switching, through electrification or the substitution of hydrogen for natural gas; carbon capture utilisation and storage (CCUS); and innovations in fuel and material efficiency. However, focussing only upon technology risks neglecting important questions about local context. For example, fuel switching and CCUS require proximity to the correct infrastructure and suitable geology to be cost effective.
Industrial sites in the same subsector but located in different areas will face different costs to decarbonise. Should we address this disparity, and if so- how? Questions about governing local decarbonisation also arise. Industries are not evenly distributed across the country but concentrated in particular places. Proximity provides the opportunity to share infrastructure between sites. However, ensuring these developments are integrated into regional cross-sector decarbonisation plans will require extensive local and technical knowledge. Who should coordinate this work and how should it be funded? Local Authorities are one candidate, but historically they have had limited oversight of the industrial sector and following the pandemic are facing a £3bn deficit.
Finally, how can local industrial decarbonisation plans support the development of regional skills and capabilities? We know that a place’s success in adapting to new circumstances is often dependent on pre-existing skills and networks. How can we ensure that the road to net zero narrows rather than widens regional inequalities? And how should local industrial decarbonisation integrate into the Levelling Up agenda promised in the forth-coming White Paper?
Government focus to date has been on decarbonising large industrial clusters through the Clean Growth Challenge. This aims to establish four low carbon clusters by 2030 and the world’s first net zero industrial cluster by 2040. Six cluster organisations were recently awarded a share of eight million pounds to coordinate the development of net zero cluster plans in their region. Being part of a cluster has the potential to unlock significant rewards for members, allowing them to benefit from first adopter advantage and engage in cross-sectoral learning. However, approximately half of industrial emissions come from so-called “dispersed sites” located more than 30 km away from the nearest cluster. How should these facilities be decarbonised? And, in the absence of a coordinating body and ring-fenced funding, is there is a risk that they, and their surrounding communities, will be left behind?
The Economic and Industrial Transitions project seeks to address these questions. We will engage with public sector bodies, trade organisations, businesses and policy-makers to explore the issues, and gain an understanding of how the decarbonisation of dispersed industrial sites can be governed in a way that is both effective and fair. Reaching net zero is a political and environmental imperative, but some localities and industries are better placed to respond to this challenge than others. Local industrial decarbonisation provides an opportunity to close the gap between regions. We should ensure that we take it.