Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. 'Menu' icon A 'hamburger' menu icon. 'Close' icon An 'x' icon, denoting a closing action. 'Previous Arrow' icon A left-facing navigation arrow icon. 'Next Arrow' icon A right-facing navigation arrow icon. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner.

Bigger Faster Better #1: Industrial clusters key in race to cut emissions

Episode 1

The first episode of the Bigger Faster Better series from Energy Voice, in association with Womble Bond Dickinson, starts a journey of exploration to uncover which countries are developing the most innovative and scalable energy solutions. Over the course of the series, we examine how the UK stacks up in its race to cut emissions and move towards Net Zero, against other nations across the globe.

In this maiden episode, we look at industrial clusters and how they have a part to play in the energy transition and how the UK and the US may be finding different ways to pursue the same end goal of cutting emissions.

To discuss this fascinating topic, Energy Voice’s Ed Reed was joined by co-host Matt Lewy, a partner in Womble Bond Dickinson’s London office, focused on energy and natural resources, as well as Dave Edwards, director of Air Liquide in the US.

In the UK, there is a shortlist of industrial clusters proposing a variety of ways to tackle emissions by combining carbon capture and storage (CCS) solutions and hydrogen projects. And they are all vying for government support, however many were left disappointed after the government awarded funding to its top two clusters – the HyNet and East Coast CCS developments in England – last October. Still, question marks remain over the next steps for this nascent industry.

Meanwhile, over in the US, some industrial clusters have already emerged, including around petrochemical and refining facilities in the Gulf Coast. Significantly, the Gulf of Mexico with its depleted oilfields and existing infrastructure will be a natural place for further CCS developments.

Mr Lewy began by explaining how the UK is starting to drive forward carbon capture utilisation and storage (CCUS) at scale. “There have been a lot of false starts for this technology as it is very nascent,” he said. But, crucially, “the government has recognised it’s a natural monopoly and it needs to work hand in glove effectively with a couple of projects at scale to get it running. They are getting the regulatory model up and running to make it bankable. This is all good news,” he added.

“Listening to commentary in the market it appears the initial CCS clusters will move forward fairly rapidly. The reality is the government is not saying it will only develop two clusters. It is just saying that this is novel. They need to start by taking two clusters forward and prioritise those,” he said.

Mr Lewy expects the two CCS projects being championed by the UK government to take a final investment decision (FID) by 2025 with operations starting towards the end of the decade.

“It seems a Scottish CCS cluster could also get bundled in quite quickly. Therefore, three clusters might be developed in one go,” he said.

Over in the US, Mr Edwards explains how the Federal Government is demonstrating strong leadership with the introduction of an Infrastructure Bill that will trigger “monumental investment, particularly in hydrogen.”

Some $8 billion of investment has been earmarked by the US government for at least four industrial hubs to be developed, he said. The US is now moving towards the proposal process for these clusters with awards expected over the next year or so, he added.

“It’s a really novel and large scale approach, very much different to what we have seen historically in the US. We’re not only going through an energy transition, but also a policy transition. From state focused to federal focused policies,” said Mr Edwards.

In contrast to the UK, Mr Edwards explains how the US is focused on hydrogen. At present more than 95% of hydrogen is produced from fossil fuel-based production in the US. There is now a large focus on investment in new production methods, particularly utilising the existing wind and solar infrastructure.

Mr Lewy noted that the UK government’s hydrogen policy is lagging its CCS policy. “What the UK government are tacitly admitting is that the feedstock will be natural gas to start with. It will be blue hydrogen created by our natural gas supply network with CCUS attached to it.”

“The UK is quite a long way behind some other jurisdictions at least in their planning. It’s a slightly different way to look at the energy transition compared to say the US,” he added.

Still, Edwards stressed that “there will be no energy transition in the US if it is not ultimately driven by private investment. Things like these hub investments can be a fantastic opportunity to accelerate the initial investment and accelerate the usage. However, the outcome has to be a market that allows growth to be sustainable and meet the needs of society.”

“That’s really the challenge of the hubs. Whether they result in a market,” he added.

“We have many of the same goals that other countries have for decarbonisation. But the pace at which it will happen will entirely be determined by the private investment side of the market. And that to a larger degree will be driven by early stage policy,” said Edwards.

“In the US, everybody is in general agreement that an energy transition will occur. Which policies are necessary to get there might see some disagreement, but the idea that it will ultimately be driven by private investment is a universally agreed position,” he added.

“Whether it is done by a funding opportunity launched by the Department of Energy to kick things off or longer-term policy, such as tax incentives or values on carbon. These are likely to be supported broadly,” said Edwards.

Listen to episode

Recommended for you

More from Energy Voice

Latest Posts