Industrial Decarbonisation Challenge: How UKRI Supports Low-Carbon Technologies for Energy Intensive Industries

Were you aware that approximately 16% of the United Kingdom’s greenhouse gas emissions are attributed to the industry sector? That’s more than the emissions from all cars, buses and trains combined! In our steadfast quest to reach net zero emissions by the year 2050, it is imperative that we focus on swiftly and proficiently decarbonizing our industrial sectors. This challenging yet vital transformation will pave the way for a sustainable future and it’s an endeavour in which we all must actively participate.

But how can we do that without compromising our economic growth and competitiveness? How can we ensure that our industries can thrive in a low-carbon future?

That’s where the Industrial Decarbonisation Challenge comes in. This is a UKRI initiative that supports the development of low-carbon technologies and infrastructure for energy intensive industries, such as iron and steel, cement, refining, chemicals and food and beverage.

The challenge aims to reduce the carbon emissions from these industries by up to two-thirds by 2035 and create net zero industrial clusters by 2040. These are hubs of low-carbon industrial activity that can boost regional development, create jobs and deliver clean growth.

In this blog post, we will explore how the Industrial Decarbonisation Challenge works and what are its main objectives, scope and impact. We will also look at some of the innovative projects that have received funding from the challenge and how they are applying low-carbon technologies in different industrial sectors. Finally, we will discuss the benefits and challenges of creating net zero industrial clusters and how they can contribute to the UK’s net zero targets.

By reading this blog post, you will learn more about:

• What are energy intensive industries and why they are a major source of carbon emissions.
• What are low-carbon technologies and how they can help reduce emissions from these industries.
• How the Industrial Decarbonisation Challenge funds and supports innovative projects that demonstrate these technologies in practice.
• What are net zero industrial clusters and how they can boost competitiveness and growth.
• How industrial decarbonisation can benefit the economy, society and environment.

What are energy intensive industries and why they are a major source of carbon emissions

Energy intensive industries are industrial sectors that use a lot of energy to produce their goods or services. For these industries, energy costs are often a high proportion of their production costs. Some examples of energy intensive industries are:

• Iron and steel
• Cement
• Refining
• Chemicals
• Paper
• Glass
• Ceramics
• Food and Beverage

These industries are vital for the UK economy, contributing £170 billion each year and providing 2.6 million jobs. They also supply essential materials and products for other sectors, such as construction, transport, health care and consumer goods.

However, these industries are also a major source of carbon emissions in the UK and globally. In 2019, industry accounted for about 16% of the UK’s greenhouse gas emissions, more than the emissions from all cars, buses and trains combined. Globally, industry accounted for about 24% of the total emissions in 2018.

The main reason for these high emissions is that these industries rely heavily on fossil fuels, such as coal, oil and gas, to provide heat and power for their processes. For example, in the UK, the majority (70%) of the industrial energy demand is for heat, with around 35% of this demand from steam systems alone. Fossil fuels are also used as feedstocks or raw materials for some chemical processes, such as producing plastics or fertilisers.

Reducing the emissions from these industries is therefore crucial for achieving net zero emissions by 2050, which is the UK’s legally binding target under the Climate Change Act 2008. It is also essential for meeting the UK’s carbon budgets, which are five-yearly caps on the total amount of greenhouse gases that can be emitted in the UK. The current carbon budget (2018-2022) requires a 37% reduction in emissions from 1990 levels, while the sixth carbon budget (2033-2037) requires a 78% reduction.

However, decarbonising these industries is not an easy task. It requires significant changes in technology, infrastructure, markets and policies. It also poses challenges for competitiveness, innovation and investment. That’s why the UK government has launched the Industrial Decarbonisation Challenge, which aims to support these industries in their transition to a low-carbon future.

What are low-carbon technologies and how they can help reduce emissions from these industries

Low-carbon technologies are technologies that can help reduce the carbon emissions from energy intensive industries by either:

• Replacing fossil fuels with cleaner energy sources, such as renewable electricity, hydrogen, biomass or nuclear heat.
• Capturing and storing or using the carbon dioxide that is produced during industrial processes.
• Improving the energy efficiency and productivity of industrial equipment and systems.

Some examples of low-carbon technologies that are relevant for energy intensive industries are:

• Carbon capture, usage and storage (CCUS): This technology involves capturing the carbon dioxide that is emitted from industrial processes, transporting it to a suitable location, and either storing it permanently underground or using it for other purposes, such as producing chemicals, fuels or building materials.
• Hydrogen production and use: Hydrogen is a clean energy carrier that can be produced from various sources, such as water, natural gas or biomass. Hydrogen can be used as a fuel or feedstock for industrial processes, such as steelmaking, refining or ammonia production. Hydrogen can also be combined with carbon dioxide to produce synthetic fuels or chemicals.
• Electrification: This technology involves using electricity instead of fossil fuels to provide heat or power for industrial processes. Electricity can be generated from renewable sources, such as wind, solar or hydro. Electrification can also enable the use of advanced technologies, such as electric arc furnaces, heat pumps or plasma torches.
• Bio-based technologies: These technologies involve using biomass or waste as a fuel or feedstock for industrial processes. Biomass or waste can be derived from various sources, such as wood, crops, agricultural residues or municipal solid waste. Bio-based technologies can also involve using biotechnology or bioengineering to produce bio-based products, such as bioplastics, biofuels or biochemicals.

These low-carbon technologies can help reduce the emissions from energy intensive industries by up to 90% by 2050. However, they also face various technical, economic and social challenges, such as:

• High costs and risks of developing and deploying new technologies at scale.
• Lack of adequate infrastructure and markets for low-carbon energy sources and products.
• Regulatory and policy barriers and uncertainties.
• Social acceptance and consumer preferences.

That’s why the Industrial Decarbonisation Challenge supports the development and demonstration of these technologies in real-world settings, through funding and collaboration opportunities for researchers, innovators and industry stakeholders.

How the Industrial Decarbonisation Challenge funds and supports innovative projects that demonstrate these technologies in practice

The Industrial Decarbonisation Challenge is part of the Industrial Strategy Challenge Fund, which is a UKRI initiative that brings together businesses, researchers and government to address the biggest challenges facing society and industry.

The challenge has a budget of £210 million, which is matched by £261 million from the industry. The challenge funds and supports two types of activities:

• Deployment projects: These are large-scale projects that demonstrate the feasibility and impact of low-carbon technologies and infrastructure in real-world industrial settings. The challenge has awarded £171 million to six deployment projects across the UK, covering different industrial sectors and regions. These projects are expected to reduce carbon emissions by around 15 million tonnes per year by 2030.
• Research and innovation centre: This is a virtual centre that coordinates and facilitates research and innovation activities across the UK to address the technical, economic and social challenges of industrial decarbonisation. The challenge has awarded £20 million to establish the Industrial Decarbonisation Research and Innovation Centre (IDRIC), which is led by Heriot-Watt University and involves over 140 partners from academia, industry and government.

Some examples of the deployment projects supported by the challenge are:

• South Wales Industry – A Plan For Clean Growth: This project aims to decarbonise seven major industrial sites in South Wales, including steelworks, refineries and chemical plants. The project will involve deploying hydrogen production and use, carbon capture and storage, renewable energy generation and grid integration.
• Repowering The Black Country: This project aims to create a net zero industrial cluster in the West Midlands, which is home to over 1,000 metal processing businesses. The project will involve deploying hydrogen networks, electrification, energy efficiency measures and circular economy practices.
• Net Zero Tees Valley: This project aims to create a net zero industrial cluster in Teesside, which is one of the most energy intensive regions in the UK. The project will involve deploying carbon capture and storage, hydrogen production and use, biomass gasification and waste-to-energy technologies.

These projects will not only reduce emissions but also create jobs, attract investment, boost competitiveness and support regional development. They will also provide valuable insights and lessons for scaling up low-carbon technologies and infrastructure across the UK and beyond.

What are net zero industrial clusters and how they can boost competitiveness and growth

Net zero industrial clusters are geographic areas that comprise co-located companies representing either a single or multiple industries that collectively achieve net zero emissions by 2040. This means that any remaining emissions from these clusters are balanced by removing an equivalent amount of carbon dioxide from the atmosphere.

Net zero industrial clusters are a key objective of the Industrial Decarbonisation Challenge, which aims to create at least one such cluster by 2040 and several low-carbon clusters by 2030. The challenge supports the development of low-carbon technologies and infrastructure that can enable these clusters to reduce their emissions and increase their efficiency.

Some of the benefits of creating net zero industrial clusters are:

• Competitiveness: Net zero industrial clusters can enhance the competitiveness of the UK industry by reducing energy costs, increasing productivity, attracting investment and creating new markets for low-carbon products and services.
• Growth: Net zero industrial clusters can stimulate economic growth and regional development by creating jobs, supporting innovation, fostering collaboration and generating value across supply chains.
• Environment: Net zero industrial clusters can contribute to the UK’s net zero targets by reducing emissions, improving air quality, enhancing resource efficiency and promoting circular economy practices.

Some examples of existing or planned net zero industrial clusters in the UK and abroad are:

• Teesside: This is one of the most energy intensive regions in the UK, with over 50% of its emissions coming from industry. The Net Zero Tees Valley project aims to create a net-zero industrial cluster by 2040 by deploying carbon capture and storage, hydrogen production and use, biomass gasification and waste-to-energy technologies.
• Humber: This is the UK’s largest industrial cluster, accounting for 12% of the UK’s industrial emissions. The Humber Industrial Cluster project aims to create a net zero industrial cluster by 2040 by deploying carbon capture and storage, hydrogen networks, electrification and bio-based technologies.
• Antwerp: This is one of Europe’s largest petrochemical hubs, with over 500 companies operating in the area. The Antwerp@C project aims to create a net zero industrial cluster by 2050 by deploying carbon capture and storage, hydrogen production and use, renewable energy generation and grid integration.

How industrial decarbonisation can benefit the economy, society and environment

Industrial decarbonisation is not only a necessity but also an opportunity for creating a more sustainable, prosperous and equitable future for all. By pursuing industrial decarbonisation, we can achieve multiple benefits for the economy, society and environment, such as:

• Economic benefits: Industrial decarbonisation can enhance the competitiveness and growth of the UK industry by reducing energy costs, increasing productivity, attracting investment and creating new markets for low-carbon products and services. It can also stimulate economic growth and regional development by creating jobs, supporting innovation, fostering collaboration and generating value across supply chains. According to a recent report by Accenture and the World Economic Forum, an integrated approach to industrial decarbonisation could create up to $3.5 trillion in annual value by 2050 globally.
• Social benefits: Industrial decarbonisation can improve the quality of life and well-being of people by improving air quality, enhancing health outcomes, reducing inequalities and promoting social inclusion. It can also empower communities and stakeholders by increasing awareness, engagement and participation in the transition to a low-carbon future. According to a recent report by the World Economic Forum and Accenture, an integrated approach to industrial decarbonisation could avoid up to 2.5 million premature deaths per year by 2050 globally due to reduced air pollution.
• Environmental benefits: Industrial decarbonisation can contribute to the UK’s net zero target by reducing emissions, improving resource efficiency and promoting circular economy practices. It can also protect and restore natural ecosystems and biodiversity by reducing land use, water consumption and waste generation. According to a recent report by the World Economic Forum and Accenture, an integrated approach to industrial decarbonisation could reduce up to 9.7 gigatons of CO2 emissions per year by 2050 globally.

These benefits are not mutually exclusive, but rather mutually reinforcing. By pursuing industrial decarbonisation, we can create a virtuous cycle of positive impacts that can accelerate and amplify the transition to a low-carbon future.

Conclusion

In this blog post, we have explored how the Industrial Decarbonisation Challenge works and what are its main objectives, scope and impact. We have also looked at some of the innovative projects that have received funding from the challenge and how they are applying low-carbon technologies in different industrial sectors. Finally, we have discussed the benefits and challenges of creating net zero industrial clusters and how they can contribute to the UK’s net zero targets.

By reading this blog post, you have learned more about:

• What are energy intensive industries and why they are a major source of carbon emissions.
• What are low-carbon technologies and how they can help reduce emissions from these industries.
• How the Industrial Decarbonisation Challenge funds and supports innovative projects that demonstrate these technologies in practice.
• What are net zero industrial clusters and how they can boost competitiveness and growth.
• How industrial decarbonisation can benefit the economy, society and environment.

Industrial decarbonisation is not only a necessity but also an opportunity for creating a more sustainable, prosperous and equitable future for all. By pursuing industrial decarbonisation, we can achieve multiple benefits for the economy, society and environment, such as reducing energy costs, increasing productivity, attracting investment, creating jobs, improving air quality, enhancing health outcomes, reducing inequalities, promoting social inclusion, protecting natural ecosystems and biodiversity, and contributing to the UK’s net zero targets.

However, industrial decarbonisation is not an easy task. It requires significant changes in technology, infrastructure, markets and policies. It also poses challenges for competitiveness, innovation and investment. That’s why the UK government has launched the Industrial Decarbonisation Challenge, which aims to support these industries in their transition to a low-carbon future.

If you want to learn more about the Industrial Decarbonisation Challenge and its opportunities and impact, you can visit the UKRI website or contact us at info@enertherm-engineering.com. You can also follow us on LinkedIn for the latest updates and news.

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