Energy Efficiency and the Clean Growth Strategy

Anna Turley Excerpts

Thursday 8th March 2018 Westminster Hall

[Anna Turley (Redcar) (Lab/Co-op)]

It is a pleasure, as always, to serve under your chairmanship, Mr Walker. I commend my hon. Friend the Member for Eddisbury (Antoinette Sandbach)—I call her my friend because we serve on the same Committee and I have the utmost respect for her and her work. She gave a very impressive speech and I thank her for introducing today’s debate.

I want to focus my comments on the clean growth strategy—I am sure that other colleagues will do a far better job than me in talking about energy efficiency. I welcome the clean growth strategy; it sets out strong commitments to cut our carbon emissions in the UK and to improve energy efficiency. I thank the Minister for her recent visit to Teesside and I am grateful that she recognises the opportunities that we have there as one of the most energy-intensive areas in the country, as well as the huge potential to do something quite transformative.

The Committee on Climate Change has cautioned that there are policy areas where the Government need to flesh out the detail of how they will deliver on those aims of cutting our carbon emissions. We all know that there is no path to meeting our carbon emission target that does not involve the decarbonisation of industry. I want to focus on that in particular.

In 2016, industrial emissions fell, but largely due to the closure of the SSI steelworks in Redcar. Actually, energy prices played a huge role in the 2015 steel crisis. In the UK, our steel companies were paying 80% above the EU median cost for energy—that is a huge factor in one of the challenges that our steel industry faces—but we know that we cannot meet our emissions targets without looking at industry. No one wishes to see a repeat of the 2015 closure of the SSI steelworks in Redcar, which ended 175 years of a major industry that built the world by providing the steel that forged everything from the Sydney harbour bridge to the new Wembley stadium. The loss of 3,000 jobs had a devastating impact on an area with a proud heritage and a proud history of driving the industrial revolution through steel production and its many other energy-intensive industries. We do not want to reduce our emissions through that kind of crisis. Industrial decarbonisation, done in a properly sustained, managed and strategic way, is the way forward, and it is a clear priority in the Government’s strategy.

We already have good energy efficiency action plans for several sectors, including cement, ceramics, oil and chemicals. That is a really positive start, but we need to go much further to meet the challenge. One of the easiest and most cost-effective solutions is carbon capture and storage. As the Minister knows, Teesside is hugely ambitious about becoming one of Europe’s first clean industrial zones and using CCS to drive that. The Teesside Collective in my constituency is ready and waiting to start decarbonising UK industry.

Teesside is home to nearly 60% of the UK’s major energy users in the process and chemicals sectors. To keep those industries thriving and to retain jobs, investment and growth in our area in a low-carbon world, we need to be serious about cleaning up their emissions. The internationally renowned North East of England Process Industry Cluster represents chemicals-based industries across the region, but it is concentrated in Teesside. The sector generates £26 billion of sales and £12 billion of exports annually, and is the north-east’s largest industrial sector.

The chemicals sector is up against strong international competition. NEPIC estimates that CCS could create and safeguard almost 250,000 jobs in the next 30 to 40 years. The Committee on Climate Change has shown that CCS could virtually halve the cost to the UK of meeting emissions targets. The UK is especially well placed to be a leader in the industry, not least because of the storage space in depleted oilfields just off our coast. The Library estimates that CCS could sustain up to 60,000 jobs and deliver a £160 billion economic boost by 2050 if it were delivered along the east coast.

The Government have promised a CCS demonstration project, which I really welcome. Of course, I sincerely hope that it will be in Teesside, but wherever in the UK it is based, the most important thing is that it comes to fruition. We cannot lose another opportunity. The new £100 million commitment is a significant downgrade from the £1 billion of funding that the Government pulled from CCS in 2015. It is a cautious investment in a crucial technology, but I welcome it as an important step forward.

On Teesside, we are taking a couple of other approaches to improving energy efficiency and decarbonising. District heating has huge potential. I welcome the Government’s recognition of the role that it can play in reducing bills for both homes and businesses, and we are keen to deliver it on Teesside. We want to use our vast renewable energy resources, which the wind turbines off our coast make very visible, to support our energy intensive industries, and we want to continue to innovate, as we have done for more than 200 years. We want to use the carbon dioxide that is produced for useful projects, such as replacing oil with bio-resource. We have a huge number of plans afoot in Teesside. We are looking to work positively and constructively with the Government, and we welcome all the positive signals we have had from them so far.

The former SSI site in my constituency will be the focus of much of that work. Ben Houchen, the Tees Valley Mayor, issued a press release this week previewing an upcoming Government energy announcement about the site. We do not know any more than the details that appeared in the media, but they sound positive, and I welcome and support this. As the Minister knows, the former SSI site has huge potential for that kind of investment to help to fulfil our ambition of being a world leading clean industrial zone, and I do not hesitate to back it.

However, I am slightly concerned that we are racing ahead to make an announcement without necessarily having the means to follow it through. I would welcome more detail about that from the Minister. As she knows, the former SSI site is still in the hands of the Thai banks, and I am concerned that a premature announcement on what will happen on the site might push up its value and make it harder for us to negotiate with the banks and get the site out of their hands to enable us to carry out all our wonderful plans and projects. Any further information from the Minister would be gratefully received.

Finally, let me say something about our potential. Energy efficiency and clean growth are not only priorities for tackling climate change and poverty, but offer huge economic potential in jobs and investment in the UK. In areas such as mine, which lost 3,000 jobs overnight, every job is critical. We desperately need investment and growth. The UK energy efficiency sector already turns over £20.3 billion, employs 144,000 people and sells exports worth more than £1 billion. We are in a prime position, particularly in Teesside, further to increase the market and to export our skills and technology to the world. This is a chance to future-proof our industries, protect our jobs and create new ones, and ensure that areas such as Teesside can play as big a role in the industry of this country and the world in the future as they did in the past.