An ambitious blueprint to deliver the world’s first low-carbon industrial sector and more than £1bn in funding to cut emissions from industry, schools and hospitals was unveiled by the Business and Energy Secretary today.

Building on the Prime Minister’s ’10-Point Plan for a Green Industrial Revolution’ published last year, the new Industrial Decarbonisation Strategy sets out the government’s vision for building a competitive, greener future for the manufacturing and construction sector. The hope is the measures announced today will create and support 80,000 UK jobs over the next 30 years while cutting emissions by two-thirds in just 15 years.

The new strategy will be underpinned by supporting existing industry to decarbonise and encouraging the growth of new, low carbon industries in the UK to protect and create skilled jobs and businesses in the UK, as well as giving businesses long-term certainty to invest in home-grown decarbonisation technology, such as that which can capture and store carbon emissions from industrial plants – rather than outsourcing industrial activity to high-emission countries around the world.

The blueprint also includes measures to build on the UK’s leading efforts in moving towards greener energy sources, with an expectation of 20 terawatt hours of the UK industry’s energy supply switching from fossil fuel sources to low carbon alternatives by 2030 – helping industry to increase its use of low carbon energy sources to around 40% of industry’s total energy consumption.

Business and Energy Secretary Kwasi Kwarteng said: “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.

“Ahead of COP26, the UK is showing the world how we can cut emissions, create jobs and unleash private investment and economic growth. Today’s strategy builds on this winning formula as we transition low carbon and renewable energy sources, while supporting the competitiveness of Britain’s industrial base.

“Backed by more than £1 billion investment, today’s plans will make a considerable dent in the amount of carbon emissions emitting from our economy and put us on the path to eliminate our contribution to climate change by 2050.”

To kick start the process, £171m from the Industrial Decarbonisation Challenge has been allocated to nine green tech projects to undertake engineering and design studies for the rollout of decarbonisation infrastructure, such as carbon capture, usage and storage (CCUS) and hydrogen.

To reduce carbon emissions from public buildings including hospitals, schools and council buildings, £932m has been directed to 429 projects across England. The Public Sector Decarbonisation Scheme funds low carbon heating systems, such as heat pumps, and energy efficiency measures like insulation and LED lighting.

The government will also introduce new rules on measuring the energy and carbon performance of the UK’s largest commercial and industrial buildings, including office blocks and factories, in England and Wales. The move could provide potential savings to businesses of around £2 billion per year in energy costs in 2030 and aim to reduce annual carbon emissions by over 2 million tonnes – approximately 10% of the current emissions from commercial and industrial buildings.

Challenge Director for the Industrial Decarbonisation Challenge at UK Research & Innovation (UKRI), Bryony Livesey said: “The announcement of £171m funding is a significant step in our progress of supporting large-scale decarbonisation efforts, and we are looking forward to working alongside the projects as they put their revolutionary plans into action.

“The benefits to these regional clusters will be substantial, both in terms of the environmental impact, as well as the opportunity for jobs and increasing the global competitiveness of industry in the areas. It once again demonstrates the UK’s industry as being at the forefront of innovation and creating greener solutions for the future.”

The five regions benefitting from Industrial Decarbonisation Challenge fund are:

  • North West (Merseyside):  Hydrogen energy and carbon capture, usage and storage (CCUS) project HyNet North West will receive almost £33m funding for two projects that aim to transform the North West of England into a low carbon industrial cluster by 2030
  • Scotland (St Fergus, Aberdeenshire): More than £31m for Scotland’s Net Zero Infrastructure project will fund important offshore and onshore engineering studies connecting industrial sites across East Scotland with access to world-class, safe carbon storage resources in rock deep below the North Sea.
  • Teesside: Net Zero Teesside and the Northern Endurance Partnership will receive more than £52m for two projects that aim to decarbonise the Teesside industrial cluster in the mid-2020s. The projects aim to use the funding for a world-first flexible gas power plant that uses carbon capture, usage and storage and that complements renewable energy, and to create an offshore CO2 transport and storage system.
  • Humber: More £21m for the Zero Carbon Humber Partnership project which aims to turn the Humber region into a net zero cluster by 2040. This project’s vision is to deliver H2H Saltend, one of the world’s first at-scale low carbon hydrogen production plants on the north bank of the Humber, and CO2 and hydrogen pipelines enabling industrial sites and power stations across the Humber to switch to hydrogen and/or capture and transport their emissions.
  • South Wales: Nearly £20m will go to the South Wales Industrial Cluster which aims to create a net zero industrial zone from Pembrokeshire to the Welsh/English border by 2040, which will open up opportunities for South Wales to become a leader in decarbonised industrial and economic growth.

Tees Valley Mayor Ben Houchen said: “Our region already produces more than 50% of the UK’s hydrogen so it was a no-brainer for the Government to set up the UK’s first Hydrogen Transport Hub in Teesside so we can properly utilise this and fully unleash our area’s potential.

“Growing the clean energy sector across Teesside, Darlington and Hartlepool is a key part of my plan for jobs, a plan that is delivering the clean, high-skilled, well-paid jobs which are essential for our future.

The areas receiving £932m government investment through the Public Sector Decarbonisation Scheme (PSDS) in England include:

  • £78,236,986 for Greater Manchester Combined Authority to decarbonise 15 bodies of the Greater Manchester public estate, including Transport for Greater Manchester, Greater Manchester Fire and Rescue Service, Greater Manchester Police, the Royal Northern College of Music, and various Greater Manchester community buildings, including 36 schools and 22 leisure centres. The buildings will get extensive green upgrades, including new air source heat pumps, solar panels to generate and create their own electricity and new lighting systems
  • £24,253,008 for Leicester City Council to upgrade 93 buildings including 56 schools. This will include replacing natural gas heating with air source heat pumps, installing LED lighting, installing solar panels, and improving the insulation of the buildings
  • £24,007,737 for Hertfordshire County Council to upgrade 182 council buildings, including 74 schools and 23 emergency service buildings. This will include the installation of heat pumps, battery storage and solar panels and improving the energy efficiency of the buildings through installing double glazing and cavity wall insulation
  • £12,640,760 for Hull University Teaching Hospitals NHS Trust to install solar panels, heat pumps and new roof insulation. Also planned are mass replacement of lighting to greener LED units, replacing inefficient air compressors, and a new supply point to Castle Hill Hospital

For a full list of the PSDS awards click here