SCA letter to Olivia Blake MP, Shadow Minister for Climate Change and Net Zero

12.04.2022

Dear Olivia,

The Scale of the UK Industrial Base and Hydrogen Development

I am writing to you in your role as Shadow Minister for Climate Change. I am not one of your constituents but a campaigner with South Yorkshire Climate Alliance and have agreed the content of this letter with the group . 

Would it be possible for a small group of campaigners from South Yorkshire Climate Alliance to meet you as we would very much welcome an opportunity to meet you to discuss the issues I raise?

I know that you are a solid advocate of a Green New Deal approach which I firmly believe to be the only way to secure a sustainable future. However, interpretations of what a GND entails vary.  I suggest that a crucial feature is that new engineering investments are concentrated on genuinely sustainable technologies. Then sectors such as care, local food production and nature restoration, which are inherently low carbon, should become a much more valued and larger part of our economy. The wellbeing and employment benefits would help enable measures to reduce consumption to become publicly acceptable. The emissions constraints we have now do necessitate policies such as an escalating carbon price to reduce the volume of materials for consumer goods being produced. Similarly, car usage cannot be maintained at current levels so “localising” our economy and radical public transport improvements are both important. Ultimately, we do not need to become reliant on an expanding industrial sector and unsustainable technologies.

Politicians from most parties are increasingly recognizing that the climate crisis demands much greater investment in low carbon infrastructure and industry. The concern I want to raise here is that there is a commonly held assumption that such investment will enable a general expansion of the national industrial base. This is highly unlikely to be the case. There is simply not enough “emissions room” to achieve that. Confidence in such an approach appears to be based on a mix of misinterpretation of evidence behind decarbonisation strategies, compounded by a natural political tendency to advocate appealing policies, without sufficiently rigorous consideration of the implications. This can lead to unwarranted faith in speculative new technologies.

Specifically with regard to the Labour Party, I am aware that last year Rachel Reeves committed to invest £28bn a year in the “green economy” if Labour wins power [see Rachel Reeves pledges £28bn per year investment in green transition – LabourList ]. One clear key aim is to address the climate emergency with greater urgency, in addition to contributing to “levelling up”. Whilst many aspects of this commitment are very positive, I have two major reservations. Firstly, the implied expectation of creating a more general expansion of the UK industrial base would be unlikely to fit within any reasonable carbon budget. Secondly, there are unrealistic expectations of hydrogen as a technological fix.  I have no more detailed information about the policies behind pledges in this article – and would be grateful if you can offer any. 

I should acknowledge that the Government has just published its Energy Security Strategy [see British energy security strategy – GOV.UK ]. Although this obviously does not directly change Labour policy, it will affect what will happen in this Parliament. We at SCA have not yet given this document close attention but it will not change the two fundamental points made below. It sets higher targets for capacity or supply of a variety of different energy sources. This is a positive in the case of the renewable energy technologies and not in most of the others. In all cases the increased targets will be more difficult to achieve in practice than the ones they replace. Perhaps the most important feature is what is lacking. There is so little emphasis on energy efficiency that the Strategy will lead to energy demand becoming unnecessarily high.  This will result in a greater need for expensive energy generation infrastructure and hence more emissions, simply to satisfy that greater energy demand.   

I explain below my reasoning for my two reservations and hope that the data will assist in
your team’s research into the area.

Future Scale of UK Industrial Base

When the Government and the Climate Change Committee (CCC) carry out analysis of the impacts of climate policies, they use estimates of the future scale of our infrastructure and manufacturing base as one important set of data.  The most robust recent one is published in Annex M of the BEIS Energy and Emissions Projections 2019 [ Updated energy and emissions projections: 2019 – GOV.UK ]. BEIS has not updated this particular data set since then. It seems logical that BEIS used it, being its own best published information, for its Net Zero Strategy. However, as you are aware BEIS has refused to publish the detailed quantitative analysis for that Strategy, offering absurd reasons to justify this [see Government ‘must be open with public’ about net zero strategy | The Independent ]. The CCC confirmed to me that the relevant analysis for its Net Zero Technical Report of 2019 was “largely based” on the previous (and very similar) issue of this data set. (This approach would probably have continued for the later Sixth Carbon Budget Report, though I do not have firm confirmation of this).

The Reference Scenario, “Industrial Production” row of figures, gives a good indication of the projected annual growth of the UK infrastructure and manufacturing base up to 2040. The figures are negative up to 2027 and then rise gradually to 0.34% by 2040. (Despite an explanatory footnote stating “It excludes energy industries.”, the CCC’s Net Zero report does not describe any separate projections of the future scale of the energy industry alone, suggesting that the same growth figures were applied). The implication is that future emissions projections were based on the assumption that the UK industrial base as a whole will only begin to grow very gradually from 2027. 

Both Government and Labour policy is aimed at increasing the scale of the UK industrial base. The 2019 Conservative election manifesto promised an additional £100bn of infrastructure investment over five years.  This would bring total spending on public infrastructure to about 3% of total GDP – up from the average of about 2% of recent earlier years [see Economists’ express doubts over Tories’ £100 billion spending promise ]. Rachel Reeves’ announcement represents a £120bn commitment over five years, though it is welcome that this would be mostly dedicated to “green” projects. In both cases, the clear intention is to stimulate further private sector investment.

If substantial growth in “green” investments is additional to modest growth in the rest of the industrial sector, then the total sector emissions would be virtually bound to exceed those included in the CCC’s models for the sector. That is simply by virtue of the sector’s scale becoming larger than what is accounted for. Beyond industrial emissions, those from the power sector (and fuel supply sector, if that is considered to be separate from “industry”) would similarly increase because of the greater energy demand to be met. The computer models used already assume that there is a rapid shift towards low carbon energy and processes, using the best technologies available. Clearly a key aim of making green infrastructure investments is that once projects are completed, they can contribute to decarbonising the rest of the economy more rapidly but the emissions embodied in their construction still need to be accounted for. 

Potential for Hydrogen

One of the ”green industries”, Rachel Reeves pledged would be invested in is hydrogen. This will almost certainly make some contribution to decarbonisation but there is a serious danger of too much reliance being placed on it. 

“Green” hydrogen, from electrolysis produced using a renewable electricity source, is close to zero carbon. Though it is likely to be costly, it does warrant strong support for its ability to replace fossil fuels where other solutions are lacking. “Blue” hydrogen produced from methane, with carbon capture and storage (CCS) used to remove most of the resultant emissions, is far from zero carbon and will lock in emissions for decades.

The CCC’s latest comprehensive report, the Sixth Carbon Budget Report, recommends a rapid scaling up of both the renewable energy and hydrogen supplies. However, it projects that only 44% of the total hydrogen supply would be produced using electrolysis by 2050 [The Sixth Carbon Budget – Fuel supply , page 39]. The main constraint is the availability of sufficient zero carbon electricity. Most of the remaining hydrogen (32%) would be from methane (essentially natural gas), with most of the other sources also involving significant emissions. That from methane could achieve up to 85% emissions savings over simply burning natural gas for fuel, according to the same CCC report [page 11]. The remaining emissions arise from extraction, processing and transport of the methane used and uncaptured carbon dioxide from the CCS process. 

The leading projects that have been proposed for the UK use the autothermal reforming process, which allows for high carbon capture rates. For example, plans starting with one reformer, are being developed as part of the H2H Saltend project on the Humber.  If completed, it is likely to be the largest autothermal reformer in the world, with 600MW capacity and amongst the first using CCS. The technical and commercial risks presented by the new technology involved with this project are considerable and it is reliant on continuing Government funding to develop it. Several previous major UK CCS schemes which had been close to going ahead over a period of over a decade have all ultimately had to be abandoned after failing to win sufficient Government funding. Whilst political support seems greater now, there remains a sharp focus on keeping costs down. This may become increasingly difficult for such projects, if and when the construction phase begins. Their viability would also be severely tested by high natural gas prices, such as those we have now.  If all of these issues were to be overcome, more reformers would have to follow on by 2050 to expand hydrogen production capacity.  To meet the CCC’s projections [as on graph on page 40 of same report], I estimate at least thirteen further similar units would be needed to meet the 72TWh/year’s- worth of hydrogen capacity indicated. Were they all to meet their design performance, the residual emissions would need to be offset by even more speculative greenhouse gas removal techniques if the 2050 net zero target were to be met. (Nature-based solutions could only achieve a modest proportion of this). 

I should add that the UN body, the Marrakech Partnership for Global Climate Action, is also sceptical about hydrogen from gas and  advocates that policy support should  “focus attention on renewable hydrogen production” [ see page 4, point 3 at Guiding Principles for Climate-Aligned Hydrogen Deployment ]

Implications of local climate targets 

If national climate commitments are to be outperformed, as is the stated intention for Sheffield and every other local authority which has set an earlier net zero date, then the “emissions room” for new infrastructure and energy projects is even more limited. In 2019, a report by the Tyndall Centre and commissioned by Sheffield City Council recommended that emissions be reduced by 14% per year, more than twice the rate implied by national carbon budgets. Meanwhile the Council had set a net zero target date of 2030, even earlier than that report recommended.

Concluding Comments

As requested we would appreciate the opportunity to discuss these issues with you.

Finally, please maintain your pressure on BEIS to make public its detailed analysis of how its Net Zero Strategy apparently meets its own climate commitments.  Ministers are withholding it because it would not stand up to scrutiny, which is completely unacceptable in a proper democracy. 

Best Regards,

Chris Broome,

Volunteer campaigner

on behalf of South Yorkshire Climate Alliance

info@southyorkshireclimatealliance.org.uk