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Major blueprint to create green jobs and slash emissions from industry, schools and hospitals

LEP Cheshire Science Corridor

New Industrial Decarbonisation Strategy Launched

An ambitious blueprint to deliver the world’s first low-carbon industrial sector and over £1 billion to cut emissions from industry, schools and hospitals has been announced by the Business and Energy Secretary.

Building on the Prime Minister’s 10 Point Plan for a Green Industrial Revolution published last year, the new Industrial Decarbonisation Strategy sets out the government’s vision for building a competitive, greener future for the manufacturing and construction sector. Part of the government’s path to net zero by 2050, today’s measures will create and support 80,000 UK jobs over the next 30 years whilst cutting emissions by two-thirds in just 15 years.

The new strategy will be underpinned by supporting existing industry to decarbonise and encouraging the growth of new, low carbon industries in the UK to protect and create skilled jobs and businesses in the UK, as well as giving businesses long-term certainty to invest in home-grown decarbonisation technology, such as that which can capture and store carbon emissions from industrial plants - rather than outsourcing industrial activity to high-emission countries around the world.

The blueprint also includes measures to build on the UK’s leading efforts in moving towards greener energy sources, with an expectation of 20 terawatt hours of the UK industry’s energy supply switching from fossil fuel sources to low carbon alternatives by 2030 – helping industry to increase its use of low carbon energy sources to around 40% of industry’s total energy consumption.

To kick start the process, £171 million from the Industrial Decarbonisation Challenge has been allocated to 9 green tech projects in Scotland, South Wales and North West, Humber and Teesside in England, to undertake engineering and design studies for the rollout of decarbonisation infrastructure, such as carbon capture, usage and storage (CCUS) and hydrogen.

To reduce carbon emissions from public buildings including hospitals, schools and council buildings, £932 million has been directed to 429 projects across England. The Public Sector Decarbonisation Scheme funds low carbon heating systems, such as heat pumps, and energy efficiency measures like insulation and LED lighting.

The government will also introduce new rules on measuring the energy and carbon performance of the UK’s largest commercial and industrial buildings, including office blocks and factories, in England and Wales. The move could provide potential savings to businesses of around £2 billion per year in energy costs in 2030 and aim to reduce annual carbon emissions by over 2 million tonnes – approximately 10% of the current emissions from commercial and industrial buildings, the equivalent to removing emissions from a town the size of Doncaster.

Business and Energy Secretary Kwasi Kwarteng said:

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.

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 business 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 low carbon and renewable energy sources, while supporting the competitiveness of Britain’s industrial base.

Backed by more than £1 billion investment, today’s plans will make a considerable dent in the amount of carbon emissions emitting from our economy and put us on the path to eliminate our contribution to climate change by 2050.

The Industrial Decarbonisation Strategy will send a clear signal to the market by setting out how the government expects decarbonisation to happen, while improving investor confidence to unleash the private capital necessary to reach net zero by 2050. In the process, the government will create the right framework for new industrial sectors to base themselves in the UK and attract inward investment, while future-proofing businesses to secure the long-term viability of jobs in our industrial heartlands.

Other key commitments within the Strategy include:

  • to use carbon pricing as tool for getting industry to take account of their emissions in business and investment decisions
  • to establish the right policy framework to ensure uptake of fuel switching in industry from fossil fuels to low carbon alternatives such as hydrogen, electricity or biomass
  • to establish a targeted approach to mitigate against carbon leakage that meets the government’s domestic and global climate goals, while keeping businesses competitive
  • to develop proposals for new product standards, enabling manufacturers to clearly distinguish their products from high carbon competitors
  • to explore the role of coordinated action on public procurement to create demand for green industrial products, helping to drive down costs and allowing a broader market to develop
  • use the government’s Infrastructure Delivery Taskforce, named ‘Project Speed’, to ensure the land planning regime is fit for building low carbon infrastructure
  • to work with the recently re-constituted Steel Council to consider the implications of the recommendation of the Climate Change Committee to ‘set targets for ore-based steelmaking to reach near-zero emissions by 2035’
  • support the skills transition so that the current and future workforce benefit from the creation of new green jobs
  • an expectation that industrial emissions will fall by two-thirds by 2035, and by at least 90% by 2050, compared to 2018 levels
  • an expectation that at least 3 megatons of CO2 is captured within industry per year by 2030, compared to minimal levels at present

CBI Chief Economist Rain Newton-Smith said:

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.

CEO of Make UK the manufacturers’ organisation Stephen Phipson said:

We welcome the government’s announcement of the Industrial Decarbonisation Strategy and the accompanying funding investment which will help create much needed green jobs as manufacturers work to come out of the current COVID crisis and rebuild.

The promise of financial help is critical. Britain’s big corporations have large ring-fenced budgets for green initiatives, but our smaller firms will need support to make sure they are able to make the changes necessary to ensure the UK meets its carbon targets and that they can benefit from the dramatic changes to the way industry will work in the coming years.

Plans to reduce carbon emissions in industrial buildings is particularly welcome as it will enable our SMEs to get started with this most urgent and basic need, before even green tech projects. Manufacturing is key in driving the solution to the green agenda and the whole industry is working together to lead the race to Net Zero.

Executive Director of the Aldersgate Group Nick Molho said:

We welcome the ambition to cut heavy industrial emissions by at least two-thirds by 2035. With continued ambitious support on innovation and the development of stable market mechanisms, the decarbonisation of heavy industry can provide UK businesses with competitive advantages in the production of low carbon industrial goods and deliver significant benefits in terms of job creation, skills development and the revival of industrial heartlands in many parts of the UK.

Challenge Director Industrial Decarbonisation Challenge UK Research & Innovation (UKRI) Bryony Livesey said:

The announcement of £171 million funding is a significant step in our progress of supporting largescale decarbonisation efforts, and we are looking forward to working alongside the projects as they put their revolutionary plans into action. The benefits to these regional clusters will be substantial, both in terms of the environmental impact, as well as the opportunity for jobs and increasing the global competitiveness of industry in the areas. It once again demonstrates the UK’s industry as being at the forefront of innovation and creating greener solutions for the future.

Projects - £171 million Industrial Decarbonisation Fund

North West (Cheshire and Merseyside)

Hydrogen energy and carbon capture, usage and storage (CCUS) project HyNet North West will receive almost £33 million funding for 2 projects that aim to transform the North West of England into a low carbon industrial cluster by 2030 – including Liverpool, Greater Manchester, Cheshire and North Wales. Two projects will look to decarbonise industry by directly capturing and storing emissions, creating a hydrogen economy across the North West, this includes repurposing old oil and gas facilities for carbon transport and storage. The projects will reduce carbon dioxide emissions by 1 million tonnes per year from 2025, rising to up to 10 million tonnes per year from 2030 and beyond, the equivalent of taking 4 million cars off the road. HyNet North West will provide green energy for local homes and businesses – a blend of hydrogen and natural gas.

As a result of government funding, HyNet North West aims to create thousands of new jobs in the North West by 2025, while protecting and retaining skilled jobs, attracting new talent and providing learning, training and upskilling opportunities.

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