The government has unveiled its Industrial Decarbonisation Strategy and set out a £1bn blueprint to create green jobs while cutting emissions from industry, schools and hospitals.
On 17 March, it published the strategy, signalling its ambition to decarbonise industry in line with net zero. To drive this, it pledged to address barriers, mitigate carbon leakage risks and play a key part in delivering large infrastructure projects. It set an expectation that emissions will need to fall by at least two-thirds by 2035, before at least 90% by 2050, with 3MtCO2 captured through carbon capture, usage and storage (CCUS) and 20TWh switching to low carbon fuels by 2030.
In a bid to kickstart this, it further revealed that £171mn has been allocated to nine projects across England, Scotland and Wales through the Industrial Decarbonisation Challenge. This will be used to undertake engineering and design studies for the rollout of decarbonisation infrastructure, such as CCUS and hydrogen.
HyNet North West is among the projects to have been awarded funding – £33mn from the Industrial Decarbonisation Challenge and £39mn from a consortium partner contribution – allowing it to accelerate to a Final Investment Decision in 2023 and become operational in 2025. Further elements will follow, such as resulting in the distribution of up to 30TWh a year of low carbon hydrogen by 2030, enough to displace 45% of natural gas across the region. The project is set to be key to kickstarting the UK’s hydrogen economy.
A further £932mn has been allocated to 429 projects across England to reduce carbon emissions from public buildings, notably hospitals, schools and council buildings, through the Public Sector Decarbonisation Scheme. This will be used to fund low carbon heating systems and energy efficiency measures.
As for the strategy itself, it lays out a series of commitments from government, including a pledge to use carbon pricing as a tool for getting industry to take account of emissions in business and investment decisions and establishing the right policy framework to ensure uptake of fuel switching in industry, moving from fossil fuels to low carbon alternatives, such as hydrogen, electricity and biomass.
It will also explore the role of coordinated action on public procurement to create demand for green industrial products, ensuring that costs are driven down and the broader market develops, as well as establishing a targeted approach to mitigate against carbon leakage. This, it said, will adhere to the government’s domestic and global climate goals, while keeping businesses competitive.