Teesside Collective Report: A business case for a UK Industrial CCS support mechanism

Teesside Collective has developed a viable financial support mechanism to kick-start a unique Industrial CCS network in Teesside. This project would transform the Tees Valley economy, and could be replicated across the country as part of the UK’s Industrial Strategy.

The final report from this work – produced by Pöyry Management Consulting in partnership with Teesside Collective – outlines how near-term investment in CCS can be a cost-effective, attractive proposition for both Government and energy-intensive industry. Total costs, including access to a transportation and storage network, are £58/tCO2 – making Industrial CCS as significant a form of carbon abatement as offshore wind (£200/tCO2) and new nuclear power (£128/tCO2). For Government to meet its carbon reduction obligations, Industrial CCS needs to be implemented alongside low carbon energy sources.

The report titled ‘A business case for a UK Industrial CCS support mechanism’, developed by Poyry Management Consulting & Teesside Collective, is available to view below.

‘A business case for a UK Industrial CCS support mechanism’ – Full report

‘A business case for a UK Industrial CCS support mechanism’ – Executive summary

 

Stakeholder endorsements of the report 

Lord Oxburgh, who chaired the cross-party Parliamentary Advisory Group that published a report on CCS in 2016, said:

“Applying CCS to industry represents some of the cheapest available carbon abatement in the UK economy. The Teesside Collective proposals offer a triple win – the greening of energy-intensive industry, meeting national carbon reduction targets and local industrial rejuvenation. I strongly recommend that Government commits to helping finance the project as a cornerstone of its emerging Industrial Strategy.”

EEF, the manufacturers’ organisation, stated:

“As the UK continues to develop its post-Brexit Industrial Strategy, this proposition for industry and government to work together to sustain and regenerate manufacturing hubs around the country in a carbon-constrained world is welcome.

With Industrial CCS essential to the decarbonisation of many energy-intensive manufacturing sectors, affordable ways must be found to get projects underway. This proposal offers a valuable insight as to how that might be achieved.”

UK Steel stated:

“The proposed pilot and roll-out strategy for a CCS hub in Teesside presents what appears to be a realistic, scalable opportunity with an awareness of affordability for participants and the taxpayer. This is very welcome from the steel sector even if it unfortunately comes too late for SSI’s steel plant in Redcar, which was part of original plans for the hub.

CCS is an essential technology for the steel sector to achieve its long-term decarbonisation goals. It is therefore encouraging to see the Teesside plans developing. However, it is also worth noting that cost-effectiveness remains a key concern for a sector like steel which faces fierce competition from plants around the world, many of which are not facing any decarbonisation costs.”

Sandbag stated:

“For thriving British industry, it is essential that the UK invests in Carbon Capture and Storage. The Teesside Collective report sets out a clear, costed way to get industrial CCS off the ground in the UK, and what’s more, the report shows it can be cost-effective when compared to many other current low-carbon technologies.

Industry is the forgotten cousin of the power sector when it comes to cutting emissions. The UK government must change this, and put their support squarely behind Industrial CCS.”

Brad Page, CEO of the Global CCS Institute, said:

“While we know that CCS is an essential and in many cases, the only technology for managing the CO2 emissions from energy intensive industries, investors and industries around the world are grappling with how best to incentivise investment in this area in the face of low carbon prices and political uncertainty.

The mechanism outlined in the report has been designed specifically to align with the UK Government’s previously stated requirements for value for money. Showing clear support for the UK’s wider Industrial Strategy, it also builds on the recommendations of the 2016 Lord Oxburgh Parliamentary Advisory Group report which came out strongly in favour of separating the management of CO2 capture processes from the transport and storage of CO2.  This is a helpful attempt to merge some of the best conceptual thinking around this issue into a real world Industrial CCS scenario, and we look forward with interest to the response from both the UK Government and the broader stakeholder community to the applicability of this proposal.”

Stephen Hands, Senior Vice President and Site Director at Sembcorp Utilities UK, which owns much of the available development land at the 2,000 acre Wilton International site, said: 

“The promotion by Government of Teesside as the preferred location for CCS development has the potential to direct millions of pounds of new global investment to the area to revitalise its industrial base. The mechanism developed by Teesside Collective shows that CCS is a cost-effective way to decarbonise UK industry.”

Steve Gledhill, Head of On-Sites, UK, Ireland and Africa, BOC, said:

“BOC welcomes the release of this report by the Teesside Collective.  Carbon Capture and Storage is the only feasible way of decarbonising large scale hydrogen production such as the BOC plant in Teesside, and we believe that the model put forward in this report represents a viable way of establishing a CCS network in a key industrial cluster such as Teesside.”

John Bruijnooge, Site Director of SABIC’s Teesside operations, said:

“SABIC welcomes the publication by the Teesside CO2 Collective of its report ‘A Business Case for a UK Industrial CCS Support Mechanism’. The report builds on the Collective’s earlier Blueprint work in addressing the challenge of describing a business model under which cost-effective near-term investment in industrial CCS might become a reality for both Teesside and other clusters of energy intensive industry. Safeguarding jobs, protecting investment and dealing effectively with the challenge of global climate change are all key to the future long-term success of this region. In the context both of the Government’s recent proposals for developing an industrial strategy and its consideration of last year’s Oxburgh CCS report, the Teesside Collective’s work represents an important contribution to how this might be made a reality.”