Labour calls on government to back hydrogen and CCS


Labour has called on government to expand investment in carbon capture and storage (CCS) and hydrogen to help establish new opportunities for highly skilled workers.

On 10 November, it published a report, setting out how the government should pursue an economic recovery that delivers highly skilled jobs in every part of the UK as part of the drive towards a clean economy. It followed a consultation with businesses, trade unions and other stakeholders around what a credible green recovery should look like, which found government should look to recover jobs by bringing forward capital investment and dedicating it to low-carbon sectors – with at least £30bn in the next 18 months suggested – as part of a rapid stimulus package to support up to an estimated 400,000 additional jobs.

The responses also uncovered a number of areas where progress has so far been limited in the UK, but where action now would support the creation of new jobs and the climate challenge. This included increasing investment in hydrogen and CCS.

On hydrogen specifically, Labour labelled it as a “potential new frontier” for climate change and stressed that while its short-term impact is likely to be limited, roll out and further development must begin now for it to realise its full potential in future. It highlighted how a number of industry groups ready to invest £1.5bn in hydrogen projects across the UK had been among those to respond to the consultation, should the right framework be in place. Despite this, Australia, Japan, South Korea, Canada and China were all cited as countries the UK is slipping behind, who already have hydrogen strategies in place, while Germany has committed £8.1bn to hydrogen development, in a “decisive early step”.

It stressed that a “workable and ambitious” hydrogen strategy must be part of any credible green recovery, owed to the significant potential and natural advantage the UK could have in this area. Labour noted the consultation had indicated how green hydrogen production support in particular could come through a new Contracts for Difference auction, advancing progress towards the realistic participation of hydrogen technologies in a low carbon economy.

With regards to CCS, the report found that evidence has suggested the CCS Infrastructure Fund – announced in the 2020 Budget – will not be enough to help the UK become a world leader in CCS technology and deployment. It drew on the CCS Association which suggested that an additional £1.8bn in annual funding would be necessary to allow separate CCS infrastructures to be development in the Central North Sea, Southern North Sea and East Irish Sea, servicing the five key industrial sectors of Humberside, Teesside, Grangemouth, South Wales and Merseyside.

It outlined how widescale deployment of CCS would also open up new opportunities for low carbon hydrogen production and hand new opportunities to highly skilled workers when transitioning from oil and gas. The report also noted research by Bellona and the University of Strathclyde, estimating that expansion of the CCS Infrastructure Fund could result in the creation of 3,850 additional full-time equivalent jobs during its first year of operation. Longer-term, CCS deployment in line with the Committee on Climate Change’s guidance could lead to 47,000 direct and supply chain jobs, as well as 178,000 linked-economy jobs.

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