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business in the community
3 July 2024
Green Economy

Is Decarbonising Industrial Hubs the Answer to a Low Carbon Future?

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WRITTEN BY: 

Ben Burggraaf, 

CEO, 

Net Zero Industry Wales. 

net zero wales

Wales, alongside several other countries, has made commitments to move to a net zero emissions economy by 2050. This is in response to climate science showing that to halt climate change, carbon emissions must stop – reducing them is not sufficient.

‘Net zero’ means that any emissions are balanced by absorbing an equivalent amount from the atmosphere. This is necessary because, for the climate to stabilise, net carbon emissions need to fall on average to zero. This isn’t only the carbon emitted in Wales and the wider UK, but also any goods and services that are imported into the country – also sometimes referred to as scope 3 emissions.

With heavy industry responsible for more than 50% of Wales’ carbon emissions, it is crucial that we support the uptake of low carbon technologies, whilst continuing to produce high value goods and services in Wales.

Net Zero Industry Wales is a not-for-profit body which provides independent guidance and support to Welsh industries in their transition to delivering net zero.

What are Clean Growth Hubs?

Clean Growth Hubs (CGHs) serve as linchpins of industrial collaboration, creating cohesive local networks that combine efforts to share resources, clean energy and infrastructure to achieve a carbon neutral future for Wales.

CGHs are essential cogs in the wheel of Wales’ transition to net zero and form a crucial component of Welsh Industrial Clusters – including:

  • The South Wales Industrial Cluster (SWIC) 

   

 

 

  • North-East Wales Industrial Decarbonisation Cluster (NEW-ID)

More and more hyperlocal CGHs are also forming – such as Barry, Port Talbot and the Deeside Industrial Hub.

These eco-systems are partnerships made up of cross-sector businesses, from utilities and heavy industry to power generation that support the societal, economic and energy needs within their dedicated regions.

With South Wales ranking as the UK’s second-largest industrial emitter, releasing approximately 16 million tonnes of CO2 annually, SWIC, for example, aims to address local infrastructure needs, reduce industrial emissions and achieve net zero targets by:

  • Contributing to a 40% reduction in Welsh CO2 emissions.
  • Retaining 113,000 existing jobs while creating new employment opportunities.
  • Unlocking £30 billion in investment opportunities.
  • Growing the £6 billion Gross Value Added from South Wales industry.

CGHs are place-based collaborative projects based on existing industrial activity in the local area and associated infrastructure. They aim to attract investment in low carbon infrastructure, enticing new businesses to the area, and generating high-quality, sustainable employment opportunities. Each CGH will have its own cross organisational collaborative approach and narrative, based on the needs of industry based locally and aligned with the “ways of working” outlined in Wales’ unique “Wellbeing of Future Generations Act of 2015”.

How do Clean Growth Hubs play a part in the net zero strategy for Wales

CGHs leverage each area's abundant resources and optimise existing gas and electricity infrastructure to facilitate collaboration, innovation, and sustainability amongst businesses.

All CGHs have the following broad goals which support the wider net zero strategy for Wales:

  1. To halt deindustrialisation, support local growth and greater resilience. By bolstering existing industries and drawing in new ones, CGHs help to create jobs, diversify products, and increase investments. Plus, they enhance economic resilience by leveraging regional resources, skilled labour, and historical context — thereby maximising benefits for local communities and improving overall quality of life.
  2. To achieve circularity. By identifying connections between processes and different industrial parties – where someone’s waste can become another’s treasure – CGHs can uncover pathways to minimise energy and material waste.
  3. To aid the development of new infrastructure. CGHs direct substantial efforts towards the upgrades, optimisations and installations necessary to support future greener power. In many cases the infrastructure connects individual hubs with others in the wider cluster
  4. To power the transition to clean energy. CGHs are committed to the generation of low carbon energy – electricity, hydrogen – from increasingly renewable sources, supplemented by alternative fuels and abated fossil fuels, to meet the energy needs of industry and other sectors.

As a collaborative flagship component of SWIC, RWE — the largest power generator in Wales – and Dragon LNG — one of the three UK LNG (liquified natural gas) terminals providing energy security into the UK — have formed a partnership to  develop the Milford Haven Carbon Capture and Storage project which aims to capture the CO2 from the power station, transport the CO2 across the Haven estuary, liquify it at the LNG terminal and ship it to a CO2 store in either Scotland or the East of England.

The Milford Haven CCS project represents a step change in net zero infrastructure which has the possibility to eliminate CO2 emissions from Wales’ second largest emitter, the RWE power station, using a non-pipeline solution for CCS technology. This project is the first of its kind for the UK.

With no geological storage for CO2 within pipeline range, SWIC (13% of the reported UK emissions in scope for UK ETS), still needs to comply with the UK Government requirement to decarbonise power generation by 2035.

Delivering Milford Haven CCS will help unlock shipping of CO2 as a national opportunity and create conditions helpful for the development of low carbon hydrogen as a fuel of the future.

This initiative, along with many similar collaborations, contribute towards reinforcing Wales' position as a potential leader in producing sustainable goods and services, strengthening supply chains and fostering circular economy opportunities within Wales' diverse industries, including steel, cement, paper, and food production.

What is the future of Clean Growth Hubs?

Long term it’s expected that CGHs will directly reduce about 5% of SWIC and NEW-ID’s total current emissions footprint, contributing to Wales’ wider sustainability goals, but indirectly enabling the remaining other 4 “COGS” that drive the decarbonisation of industry (i.e. energy & resource efficiency, fuel switching (to electricity and/or hydrogen), carbon capture &   utilisation and carbon capture & storage).

However, for CGHs to kick-start and progress successfully they require strong private and public sector partnerships to overcome the across various legal, technical, economic, environmental, planning and other potential barriers. These partnerships are developed through various local initiatives, such as Innovate UK and Shared Prosperity Fund enabled projects, and/or membership through NZIW.

The concept of CGHs is replicable beyond Wales into any other part of the UK, to any place that has a concentration of energy intensive commercial and/or industrial activity. However it will require businesses and local public bodies to step out of their comfort zones, i.e. tackle challenges like decarbonisation within rather than cross organisations and work collaboratively to maximise the benefits CGHs bring to businesses.

The overall goal of NZIW is to empower businesses to deliver change that is not only essential in supporting the energy intensive industries that make Wales thrive, but critical in reaching Wales’ and the wider UK’s net zero targets.

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