Emissions should fall by at least 90% by 2050, says the hotly-anticipated Industrial Decarbonisation Strategy, which has been broadly welcomed by both industry leaders and NGOs. It also sets out expectations for switching 20 terawatt-hours of annual industrial energy supply to low-carbon sources by the end of this decade, equivalent to 2.3 gigawatts or 40% of present consumption.
It says that government will also work with the recently re-established Steel Council to “consider the implications” of the Climate Change Committee’s recommendation that ore-based steelmaking should have near-zero emissions by 2035.
“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,” said business secretary Kwasi Kwarteng.
Roz Bulleid, deputy policy director at Green Alliance, said: “The commitment to look at near zero ore-based steelmaking by 2035 is welcome, but the country needs to move quickly if our steel industry is not to be left behind. Other countries, such as Germany and Sweden, already have trials in place for low carbon steelmaking using hydrogen. It is becoming increasingly clear that the future of the steel industry will need to be based around clean steel that does not add to our carbon footprint.”
In support of its objectives, the government has announced the winners of its Industrial Decarbonisation Challenge. A total of £171m has been allocated to nine projects in Scotland, south Wales and northern England for engineering and design studies for carbon capture, usage and storage (CCUS) and hydrogen infrastructure. A further £932m will go towards 429 Public Sector Decarbonisation Scheme projects in England.
The Labour Party was left underwhelmed by the investment, saying that thirty times more investment was needed. Shadow business secretary Ed Miliband said that the government, “talks a big game on green but doesn't deliver with nearly the scale or ambition that's necessary. None of this money is new - these announcements simply allocate money already announced. Strip away the rhetoric and we see the fact that while Germany is investing €7bn in a hydrogen strategy our government is investing a tiny fraction of that.”
While welcoming the strategy, the Aldersgate Group also struck a note of caution about the money put behind it. “It is important that such funding continues to be made available in the years to come to help accelerate the demonstration of these technologies at scale,” said its executive director Nick Molho.
“Building on efforts to accelerate innovation, it will be essential for the UK Government to put in place a comprehensive set of long-term policies that drives timely and cost-effective private investment in industrial decarbonisation and strengthens the competitiveness of UK businesses in the process. This requires ensuring that the price of carbon under the UK Emissions Trading Scheme is clearly aligned with the net zero target, with the use of free allowances gradually reducing and the UK considering a linkage between the UK and EU ETS on the basis of a shared ambition for climate neutrality,” he added.
Chief executive of manufacturers’ organisation Make UK Stephen Phipson said the funding “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.”