Westminster’s multi-billion pound plan for a “green industrial revolution” has been touted as a “welcome signal” of what the UK’s path to net zero may look like.
The energy sector has been reacting to Boris Johnson’s 10-point plan for eradicating the UK’s contribution to climate change by 2050.
It includes total investment of £12 billion to decarbonise various sectors of the UK economy, with claims the figure could be matched three times over by the private sector.
As part of the plans, the UK Government has committed to working with industry to generate 5 gigawatts (GW) of low carbon hydrogen production capacity by the end of the decade for industry, transport, power and homes.
More than £500 million has been set aside to advance nuclear as a clean energy source, which could support as many as 10,000 jobs, while the cut off for the sale of new petrol and diesel cars and vans been brought forward by 10 years to 2030.
The blueprint also includes a commitment to make the UK a “world-leader” in carbon capture and storage (CCS) technology, with a target to remove 10 megatonnes of carbon dioxide by the end of the decade.
To achieve this the government has freed up an extra £200m of funding to create two new clusters by the mid-2020s, with another two on the cards after that – it increases the total planned investment in CCS to £1 billion.
The St Fergus gas terminal near Peterhead, the home of Pale Blue Dot’s Acorn CCS project, could be one of those in line to benefit from a share of the cash.
Commenting on the multi-billion pound plans, Deirdre Michie, Oil and Gas UK’s chief executive, said: “We are pleased to see the Government is committed to its ambitious plans for tackling emissions in spite of all the other challenges we face. Our industry is already in action, evolving and contributing. We were one of the first major sectors in the UK to embrace the Government’s target to achieve net zero emissions by 2050.
“The good news for jobs and the economy is that with the right support, companies based here in the UK have the expertise to make us world leaders in tackling emissions, including through carbon capture and hydrogen production, both of which are key to the clean energy system of the future.
“Exciting new technologies and innovations need to sit alongside delivering real reductions in emissions and improved efficiency. Things that our industry and every one of us can be getting on with right now.”
Shell took to twitter to signal its support the government’s proposals, highlighting the importance of CCS in decarbonising heavy industry across the UK.
Extra funding for CCS is welcome: we agree with @theCCCuk that CCS is “necessity, not an option” to meet net zero (we can’t decarbonise heavy industry without it).
— Shell UK (@Shell_UKLtd) November 18, 2020
However, despite being well received by much of the oil and gas industry, there are concerns in some quarters that the 10-point plan does little to address the lack of movement on the energy white paper.
Last week, it was revealed that the long-awaited document, originally due in spring, is unlikely to be published until after the Treasury’s spending review on November 25.
Martyn Link, chief strategy officer at Aberdeen-headquartered Wood, said “The UKs ability to show leadership on a global stage is only credible if its underpinned by robust domestic policy and commitments.
“More detail will be required in upcoming policy papers, but the 10-point plan does offer a welcome signal of what the UK’s path towards net-zero will look like.”
It’s also thought the government’s investment figure may fail to scratch the surface.
Lewis Jones, global projects partner at London-based energy lawyers Baker Botts, described the £12bn outlined in the proposals as “relatively modest” and said it would take time to assess whether it’s sufficient enough to enact a “fundamental change”.
He added: “The strategy appears to be based on providing government funding to kick start new technologies or deployment, with the hope that the private sector will then have the confidence to finance the commercialisation of these technologies. It remains to be seen whether this strategy will be successful.”
On the CCS commitments, Mr Jones said: “Once again, a UK government announces investment in carbon capture, utilisation and storage. In fact, the announcement of funding for this sector is in addition to the Treasury’s announcement of £800m for CCUS made earlier this year.
“Cynics with long memories will recall that previous funding announcements for pilot projects made over a decade ago were subsequently withdrawn. This time may be different.”
Suzie Ferguson, carbon capture technical lead at Wood, said: “The £1bn earmarked for the UK’s CCS industry is a welcome signal and could be the tip of the iceberg. With a long-term vision and the right capital investment, we could integrate the UK’s five main industrial clusters with the three offshore hubs that account for most of our storage capacity, and really set the bar on what a world-class carbon capture, transportation and storage network looks like.”
“This decade is a crucial period for CCS in the UK – setting a near-term goal to capture 10m tonnes of CO2 by 2030 is realistic, and will lay the foundations for the rapid increase in CCS deployment that will be needed in the 2030s and 2040s in order to deliver on our net-zero ambition.”
Unite the Union claimed the plans suffered from a lack of ambition, branding them a “half-baked offer” that failed on “so many counts”.
Steve Turner, assistant general secretary for manufacturing, said: “We’ve urged the prime minister to match the ambition of our competitor nations so that innovation and job creation is embedded in the any strategy to build back better. There is enormous potential to both create the skilled manufacturing jobs in communities crying out for the work and to super-charge the development of green technologies to better our futures.
“We urge the PM to open up the tent and get workers and businesses involved in a genuine national effort to transition our economy. Let’s start with a deal that supports jobs, skills and communities producing innovative vehicles and aircraft to green our streets and skies, turbines to generate wind and tidal energy and the products required to retrofit and build the greener homes we desperately need.
“Global manufacturers need the confidence as well as financial and policy encouragement our competitors are providing to make those major decisions to invest in the UK – and the planet needs action on a scale and of an urgency that will make a real difference. We can’t have half-baked offers when we need decisiveness and action.”