Government needs to back big infrastructure projects like Teesside’s bid for industrial carbon capture and storage (CCS) if the UK is to lead the way, a process sector expert has claimed.
Teesside took its bid to become a Euro trailblazer for industrial CCS to Westminster this week, with the area’s heaviest polluters driving the scheme to mitigate rising green taxes by storing emissions under the North Sea.
The network - Teesside Collective - could create and safeguard thousands of jobs. Local enterprise partnership Tees Valley Unlimited (TVU) will present the business case for Europe’s first CCS equipped industrial zone this summer, and has appointed investment bank Societe Générale to make sure the project is financially viable and competitive.
But Stan Higgins, chief executive of NEPIC (North East Process Industry Cluster) says the government needs to take a ‘much bigger role’ in the financing of large schemes instead of leaving it to the private sector - or other countries will steal a march.
He said: “Other countries get on with it and pay for their infrastructure. We don’t do that.
“We need integration of industry to be competitive in engineering terms, but we have this idea that the private sector can do everything. These projects are so big, that sometimes government needs to step in.
“There are unknowns, and that’s why we have to do this study on CCS; then there will be consulting with government and regulators, which is why we should have been doing this study two or three years ago.”
Steelmaker SSI UK, BOC, Lotte Chemical and GrowHow are the four anchor projects, and more companies would plug into a shared pipeline to transport carbon. Europe’s first network could attract more companies to Teesside as green taxes increase; but there are concerns other countries will nudge ahead in the race.
Sarah Tennison, TVU’s low-carbon economy manager, said: “We are ahead of the game, but Rotterdam was focused on a very similar demo project. That’s why we need to keep going with this; because of competitors.”
Dr Higgins added: “The questions are - is it affordable, how would it work commercially and what is the regulatory environment around carbon and emissions taxation?
“The whole thing is dependent on understanding what that’s like going forward. Is government going to make emissions so expensive that companies have to put their gas in these systems? All these things have to stack up before any project would be financially worthwhile.
“But Britain is building a branch economy, no big corporations that are big enough to carry such things on their balance sheets.”
The House of Commons launch event heard from the CCS Association, TVU chair Sandy Anderson OBE and Dan Osgood from the Department of Energy and Climate Change.
Sarah added: “Dan Osgood didn’t say government would definitely put money into the project, but he was positive; claiming it was an important project for the UK. Government can support by making sure the policy regime is as stable as it can be, so projects can attract bank funding.”
MP Tom Blenkinsop, who sponsored the event, said: “For long-term sustainability of our industry and inward investment, this scheme is a no-brainer. We are an ideal location, and we need to keep banging the drum.”
The launch comes as the Centre for Cities’ report Cities Outlook 2015 report reveals Middlesbrough has the biggest carbon footprint for any city or major town in the UK; in 2012 - the latest year for which figures are available - the area emitted 25.6 tonnes of CO2 per head of population.
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