Fears the Humber could lose billions of pounds of potential investment have been voiced after the Government missed the region out of initial carbon capture development discussions.
Hopes to be the flag bearer for the grand clean-up solution for power generation and heavy industry have been dashed as Track One project negotiations were limited to the North West and North East.
A portfolio of £15 billion of investment from major multinationals is now at best put on hold until later in the year, with concern it could go elsewhere as the race to Net Zero hots up globally. US and European legislation has been turning heads, with urgency already seen as key before this latest set-back.
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Richard Gwilliam, chair of the Humber Energy Board, told how his phone had not stopped ringing all morning as partners digested the news, wrapped up in the government’s Powering Up Britain strategic blueprint.
He said: “There is an overriding sense of disappointment from the region. It is a very tough day at the office for some of the region’s major employers. This uncertainty will lead businesses with international portfolios of assets to question the appetite around investment in the Humber and the UK.
“We have been successful in attracting major businesses to the Humber with the scale of the decarbonisation story. A lot have developed such projects all over the world. We know we are sitting on about £15 billion to be invested between now and 2030. We need clarity about what is going to happen, and that is the risk. Businesses like certainty.”
Looking ahead, Mr Gwilliam, who wrote to Chancellor Jeremy Hunt and Energy Security and Net Zero Secretary Grant Shapps ahead of the Spring Budget, said: “We as a region remain open to further dialogue with government to what this means, and it was encouraging there is commitment to subsequent Track Two and Track One expansion. It is critically important we get some clarity from the Government now if they are to stem the flow of investment out of the region.”
Mr Gwilliam also highlighted the geological advantage the region has, with the largest storage capacity when it comes to CO2 “Longer term this will be a case of when, rather than if, it is whether business holds its appetite for investment,” he said of the opportunity.
Viking CCS, a South Humber Track Two project, was described as a "leading contender" in the document, with Gigastack, a green hydrogen project involving Orsted, Phillips 66 and ITM Power, also shortlisted in an inaugural round of production projects that was included. But the pan-Humber CCS, that had been partnered with the successful Tees under the Track One East Coast Cluster umbrella, was seen as the real game-changer for the region and the forerunner opportunity.
A spokesperson for Zero Carbon Humber, the industrial collaboration behind it, said: “We are disappointed that no projects in the Humber have been selected to progress through to the next phase of negotiations. This risks the loss of £15bn of investment for the region, along with thousands of high-skilled jobs, and contract opportunities for businesses across the UK. The Humber is the largest and most energy intensive industrial region in the UK, with multiple mature carbon capture and hydrogen project proposals backed by experienced international investors. Simply put, without the Humber, the UK will not meet its net zero targets.
“In order to realise the greatest impact, cost savings and inward investment for the region, the East Coast Cluster’s proposed common infrastructure and offshore CO2 storage must be developed concurrently for both the Humber and Teesside regions.
“Investors considering major clean energy projects in the UK urgently need assurance and greater clarity from the Government on the next phase of the competition.”
Strong support from across the region had been garnered over a long-running campaign, with attention now turning to the opportunities to add to the initial projects promised later this year.
Hull & Humber Chamber of Commerce president, and chairman of the Shipping, Transport and Renewables Committee, Albert Weatherill, said: “I am surprised and hugely disappointed that the Humber, which is the biggest emitter of C02 in the UK, has been overlooked in these announcements when so much work has already been done and billions of pounds of private sector money has been pledged for these schemes.
“It will also mean that thousands of high quality jobs will be missed out on. It’s very difficult to understand how one of the biggest industrial regions in the UK, and the second biggest CO2 emitter in Europe, can be ignored by the Government if it is serious about Levelling Up and its ambitions to meet its zero carbon targets.”
While pleased to see Teesside success, Henri Murison, chief executive of the Northern Powerhouse Partnership, said: “We’re at a loss to see why the Humber has been missed out entirely. It means we’ll lose out on £15 billion in private investment - £2 billion from Drax alone - not to mention thousands of high quality jobs.
“The Humber is the biggest industrial emitter in the country and it’s make-or break for the UK’s net zero ambitions. This decision raises serious concerns about whether the government is playing political games - divide and rule - instead of doing what is right for the economy and the path to decarbonisation.
“It’s vital that the government accelerates the expansion of the scheme to avoid any more damage.
“We need to be doing much, much more to respond to the challenge of the US’s Inflation Reduction Act, which poses an existential threat to the UK’s green industries. We cannot afford to wait until autumn - this will be too late if we want to compete globally.”
The CBI, which has a dedictd Humber decarbonisation focous, and the Carbon Capture and Storage Association have both highlighted the Humber's omission too, while welcoming the steps forward as a whole.
Ruth Herbert, chief executive of the CCSA, said: “Collectively, these projects will capture million tonnes of CO2 a year and protect and create many thousands of jobs in critical sectors, delivering significant economic growth in two of the UK’s industrial regions. However, today’s announcement will be particularly disappointing for the Humber region. Projects based there urgently need clarity, alongside other unsuccessful projects. Government must therefore set out the process for further projects to be added to the first two clusters."
Read more: SSE celebrates hydrogen win for Humber with further opportunity for CCS eyed
Beckie Hart, CBI regional director for Yorkshire & Humber, said: "The selection of successful projects moves the country on from ambition to delivery. While that undoubtedly represents significant progress, there are missed opportunities which urgently need to be addressed in order to hit the Government’s own carbon capture targets and capitalise on this massive economic opportunity for the UK.
“This is particularly true for the Humber – a strategically important cluster as the UK’s most carbon intensive region. CCUS is an essential part of its journey to net zero and will help underpin tens of thousands of green jobs in the future. Government should work with businesses in the region to provide clarity about how these projects will advance.
“Those bids that were unsuccessful this time need a quick and clear route to future approval, otherwise significant effort and investment could be wasted and emissions from industrial clusters will remain higher for longer."
Her views were echoed on a national level by CBI director of decarbonisation, Tom Thackray.
Hull North MP Dame Diana Johnson described it as "simply wrong and a stupid decision to ignore us". Responding on Twitter, she said: "40 per cent of industrial emissions are coming from the Humber area. We need to lead the way on carbon capture and already had some investment lined up. What is the Government playing at?"
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