Decarbonising the UK: Role of Shipping Emissions

Debate between Christina Rees and Alexander Stafford

Tuesday 14th September 2021 Westminster Hall

[Christina Rees (in the Chair)]

Before we begin, I encourage Members to wear masks when they are not speaking, in line with Government guidance and that of the House of Commons Commission. Please give each other and members of staff space when seated and when entering and leaving the room. Members should send their speaking notes by email to hansardnotes@ parliament.uk. Similarly, officials should communicate electronically with Ministers.

[Alexander Stafford (Rother Valley) (Con)]

I beg to move,

That this House has considered the role of shipping emissions in decarbonising the UK.

I refer the Chamber to my entry in the Register of Members’ Financial Interests. It is a pleasure to speak in this important debate with my fellow MPs from across the House, and I hope my position reflects their views that decarbonisation is an issue where we need to be truly united in our approach. In truth, the title of the debate is a misnomer, as I wish to discuss the positive contribution that the shipping industry and our excellent port infrastructure across the UK can make to achieving a low-carbon future. In particular, in the year of COP26, I wish to highlight the role that shipping carbon dioxide and hydrogen can play in ensuring a prosperous and environmentally sustainable future for British industry.

In the year of COP26, when the United Kingdom will be placed on the global stage, we must make significant progress towards our collective net zero targets. While we know that great strides are being made to decarbonise our electricity networks, with arrays of wind farms and solar panels covering our countryside, we must also pay attention to industry, where hundreds of thousands of jobs and significant segments of our economy are deployed. These sectors, such as our world-leading cement, glass, steel and petrochemicals, are not easy to switch to electrical power and will need to utilise carbon capture, utilisation and storage technologies—CCUS—to decarbonise.

The North sea has been the bedrock of our economy for decades, providing an economic shot in the arm to UK plc and delivering a world-leading expertise base that has been exported globally. Now is the time to turn our attention to putting the skills and infrastructure of this valuable national industry into the ports developing carbon capture and storage, which is essential in helping hard-to-abate sectors to decarbonise and in ensuring that natural gas supports the development of the emerging hydrogen economy. In essence, it is putting the upstream industry in reverse to develop CCUS.

We must recognise the support the Government have already placed behind this emerging sector, with a significant programme to support four industrial clusters. However, we should also recognise the guidance from the Committee on Climate Change, which calls for more ambition and the need to support as many potential CCUS industrial clusters as possible, whether that is in the Acorn Project in Scotland or projects in Teesside, Humberside or the north-west. These clusters are blessed with some of the best sub-surface geology to support permanent carbon dioxide storage. The projects are relatively simple to understand, whether they are reforming hydrogen from natural gas coming onshore and then pumping the CO₂ captured back into depleted reservoirs, or perhaps CCUS-enabled power stations, such as the innovative net zero Whitetail clean energy NET power station planned for Teesside.

The UK is also seeking to become a global leader, with Europe’s first at-scale direct air capture facility being developed by the UK-based Storegga in north-east Scotland, sucking CO₂ from the air and storing it underground. Whether we seek to reuse existing oil and gas infrastructure or to deploy new pipelines, CCUS has the potential to support communities and regional economies around the North-sea coastline for decades to come, as well as places further inland like Rother Valley.

Climate change is not an issue that is confined to the North sea or the Irish sea. The United Kingdom must come together to develop a net zero future. In Scotland, we see the UK’s first hydrogen-powered community, but equally the Thames estuary and the Solent are embracing the potential for transitioning to a hydrogen-fuelled grid and energy generation. That presents a challenge. Without suitable geological storage, these hard-to-abate emissions are not able to sequester the carbon and prevent it from reaching the atmosphere. This is where our proud island nation is able to respond to the challenge and work collaboratively to provide a vibrant, low-carbon shipping and transportation network, connecting industrial clusters, such as refineries on the south coast, the south Wales emitters and the Thames estuary, to regions such as north-east Scotland. The latter possesses a world-leading geological storage resource, with more than a third of the UK’s identified storage resource located within 50 km of existing gas pipeline infrastructure, which can be repurposed to take CO₂ offshore.

The Scottish cluster is a superb example, with the Acorn Project one of the most mature UK CCUS and hydrogen projects, with the backing of both the UK and Scottish Governments and even, dare I say it, the European Union. It will enable carbon capture deployment across a diverse set of emitters, capturing at least 6.2 megatonnes per annum of carbon dioxide by 2030. That represents around 60% of the ambition set out in the Government’s great 10-point plan and is a vital part of it. To make that a reality, emitters from across the UK are seeking to make use of that national resource, along with storage locations along the east coast and the north west. The UK’s port network needs to stand ready to respond to that demand and needs to invest in the significant infrastructure required to create a UK port network capable of handling large volumes of CO₂ and hydrogen shipping. Shipyards from Appledore to the Clyde will also need to mobilise to build the shipping tonnage needed to support this nascent industry.

From Peterhead port, Europe’s largest fishing port, to Grangemouth, Scotland is readying itself to make investments to ensure that it can support the transition to a low-carbon economy. Existing jetties can be repurposed to support the berthing of ships bringing CO₂ for storage, and proximity to the network of existing oil and gas pipelines offers the possibility of easy access to eventual storage sites. For example, with the conversion of Peterhead power station to gas, which will be delivered by pipe from St Fergus, the jetty can be repurposed for handling both bulk CO₂ imports and hydrogen exports. That will allow shipping to commence on a more cost and time-efficient basis than would have been the case for a cold start, and that would save up to about £50 million in up-front investment and three years for consenting and construction. We are already on the way and that provides a natural advantage.

Supported by associated infrastructure, pipe routes and with nearby land suitable for development, Peterhead port can play a strategically important role in the emerging energy transition, especially in handling CO₂ for eventual storage and hydrogen for eventual export. That is important. We want to export the hydrogen. We do not just want to make it for the UK; we want to be a world leader and export the technology and the resource abroad. As the sector evolves, and to take maximum advantage of the opportunities available for national and international trade, it is likely that a second berth will be required in the port within a few years to handle the volumes of potential CO₂ and hydrogen shipments, requiring further investment of up to £30 million.

Similar infrastructure and expertise can be used to support the import or export of hydrogen at other ports around the UK, such as the Forth ports. Given the proximity of the Forth ports to proposed blue hydrogen projects and to the UK’s biggest source of offshore wind, that could be vital for the deployment of the UK’s hydrogen sector, although it is worth saying that we should be aiming for green hydrogen, rather than blue. Blue is only the journey to get to where we want with green hydrogen. I want to make that perfectly clear: blue hydrogen is not the ultimate answer.

That port infrastructure and the shipping industry can also play a central role in supporting other areas of the UK to reduce emissions. The south Wales industrial cluster is the second largest CO₂ emitting cluster in the UK. It contains several key UK assets, including the UK’s largest steelworks, where my father-in-law used to work, and the UK’s largest combined-cycle gas turbine, the UK’s largest energy port, the UK’s only nickel refinery and the Royal Mint, as well as several key and core manufacturing industries. Around 20% to 30% of the UK’s natural gas supply is imported into the UK through south Wales. With steel, cement, chemicals, refining and natural gas supplies all present in the region, CCUS will be essential for delivering net zero in south Wales. However, south Wales does not have any known local geological storage of CO₂ available, which means the development of a CO₂ shipping fleet would be essential for its decarbonisation. The south Wales industrial cluster includes several deep-water harbours and ports that could accommodate CO₂ shipping, and with the right investment, can develop a shipping network that can effectively ship and store CO₂ from this cluster at the Acorn Project and other sites.

On Teesside, meanwhile, innovative net zero power stations will also need access to resilient geological storage of CO_2. The Whitetail clean energy plant itself uses the highly innovative NET power technology, which combusts natural gas with oxygen, rather than with air, and uses supercritical CO₂ as a working fluid to drive a turbine instead of steam. As a result, nearly all air emissions, including traditional pollutants and CO₂, are eliminated and pipeline-quality CO₂ is produced, so that it can be captured and sent by ship from Teesside to storage locations. That is further proof of the UK being a global science and technology powerhouse. It is critical that this plant and further plants have optionality to send CO₂ to distributed stores.

Similarly, the Cavendish project in the Thames estuary is a large-scale, low-carbon hydrogen generation project. Based on the Isle of Grain, the hydrogen production facility will be near gas and electricity networks, power stations and a liquefied natural gas facility. It is expected to meet the large energy demand of London and the south-east for power, heating and transport. Again, this project will need the ability to capture and sequester its CO₂ emissions, but there is no suitable geological storage nearby, so shipping infrastructure will be essential for the project to sequester its CO₂ in suitable storage locations.

These are just a few examples of vital low-carbon projects for which access to port infrastructure and a shipping network capable of transporting CO₂ and hydrogen is not just nice to have but absolutely business-critical if we are to hit our ambitious targets. They are ambitious targets, but I know we will get there. However, we can only get there as one country—one country of England, Wales, Scotland and Northern Ireland combined—and if we can move around the CO₂, which is to say the “bad” CO₂. We need that shipping infrastructure to help us do that.

We are an island nation; we are Nelson’s nation. We are a nation of sailors, and that is what we should do with our CO₂. We should embrace our former fleets; we should have the same clarion cry that we had with the merchant fleets of old, to move our CO₂ around and defeat the enemy that is climate change.

In this year of COP26, I am sure that the Minister and colleagues across the House will recognise the importance of shipping’s role in reducing CO₂ emissions and I hope that we can work together to ensure that policy supports the development of the shipping infrastructure we must successfully transport CO₂ emissions and hydrogen, as needed, to achieve a net zero future for the whole of the UK. That will bolster the economy, lower our emissions and really turbocharge UK plc into the next millennium. I know that will happen and I also know that, although ports are important, Rother Valley will still be at the heart of hydrogen production in the future.

UK Hydrogen Economy

Debate between Christina Rees and Alexander Stafford

Thursday 17th December 2020 Westminster Hall

[Alexander Stafford]

Of course, we need to restrain all sorts of leaks in our systems, whether from our gas pipes or our water pipes. I know that there are water pipe leaks as well, and I agree that we will need to upgrade certain elements of pipe. If we want to push at the very start, hydrogen will work very quickly, but of course with all technologies we need to maintain the infrastructure, which I know the Government will do very well.

In the boiler sector, Worcester Bosch and Baxi are leading the way in producing the world’s first hydrogen-ready boilers, which can run off either pure hydrogen gas or natural gas, including natural gas blended with up to 20% hydrogen—a mixture that all boilers can utilise, so we are ready to go with that mix. Hydrogen boilers have a distinct advantage over heat pumps, which are another solution, in that they are many thousands of pounds cheaper, costing about the same as a gas boiler. It is estimated that a hydrogen boiler will cost £2,500, whereas a heat pump for a house will cost between £6,000 and £18,000. That is important in terms of fuel poverty, as the cost of heat pumps is potentially unaffordable for some families.

Furthermore, a hydrogen boiler does not take up much space and takes a matter of hours to install. In contrast, an average of three days is needed to fit a large and unwieldy heat pump. It is also worth bearing in mind that the electricity grid has five times less capacity than gas, and relies on gas in the winter to prop it up, making the gas network the obvious choice for resilience purposes.

If there are subsidies for heat pumps, why are there not considerable subsidies for the production of hydrogen? There should be, as that would also help to bolster more jobs. Earlier today, my hon. Friend the Member for Sedgefield (Paul Howell) raised with me the need to train up more boiler installers so that we have those skills. The Government should be supporting that.

I am pleased to note that the Government have helped initiate a number of projects that have demonstrated the technical and economic viability of hydrogen as a pathway to decarbonising the gas grid. I have been privileged to learn about many of them since my election, although hon. Members will agree that the preference for similar-sounding names is quite the tongue twister. They include the Hy4Heat programme, the HyDeploy project run by ITM Power, Cadent and the Northern Gas Networks, the H21 project led by the Northern Gas Networks, National Grid’s HyNTS Hy Street experiment, and SGN’s H100 Fife project.

The Net Zero Teesside and HyNet large-scale projects are crucial to stimulate the mass production of hydrogen so that we can move from theory to reality when it comes to home heating. Those projects are a firm demonstration of the Government’s interest in and commitment to hydrogen as a technology to help us achieve net zero. They have also provided evidence of the technical and economic viability of hydrogen as a pathway to low-carbon heat, and have helped us address some of the inherent challenges of rolling out technology. In addition, the geographical spread of the projects across the United Kingdom—many are in left-behind areas—shows that hydrogen can play an important part in the Government’s levelling-up agenda.

The success of those projects shows that the distribution, transmission and production of hydrogen must be a priority for the UK. However, the UK is at risk of being overtaken by other countries that have more aggressive and developed approaches to hydrogen. For example, Germany has earmarked €9 billion for the expansion of hydrogen capacity, targeting 5 GW by 2030 and a further 5 GW by 2040. Japan established its hydrogen strategy in 2017, which has given industry the confidence to invest.

To date, the UK has lacked the clear policy framework that exists in Japan, and Government investment has been lower than in countries such as Germany. That is precisely why the Prime Minister’s 10-point plan was so welcome, and why the forthcoming hydrogen strategy must be ambitious, wide-reaching and published as soon as possible.

Having addressed hydrogen transport and home heating, I now turn to hydrogen’s potential for use in industry. That is of great importance to constituencies in the former red wall such as mine, Rother Valley. Traditionally, my area has relied on energy-intensive industrial processes. Sheffield is, of course, famous for steel making. It is vital that we decarbonise our industry and provide our factories with renewable energy that is powerful, in ready supply and affordable. Rother Valley bore the brunt of British coal’s lost competitiveness compared with cheaper foreign imports, and the high cost of energy and the struggling industry has been the narrative ever since. We now have a chance to ensure energy sustainability for generations. In doing so, we will turbocharge our national industries in the post-Brexit world.

In the light of that, I warmly welcome National Grid’s ambitions to build a hydrogen transmission backbone consisting of pipelines connecting major industrial hubs across the UK. Such hubs exist in Humberside, Teesside, south Wales, Grangemouth in Scotland, Merseyside and the Isle of Grain in Kent. The concept is that significant volumes of hydrogen will enable the build-out of 100% hydrogen pipelines to decarbonise early adopters in industry and transport. Cadent is planning a similar idea of piping 100% hydrogen by Pilkington’s glassworks in Ellesmere Port so that the factory can reduce its costs and stay open to save jobs.

Members will know that I am always keen to focus on my region of Yorkshire and the Humber in this House, which is why Zero Carbon Humber is of such relevance to me and to industry in and around my constituency. Humberside is currently the UK’s largest carbon emitting industrial area, but Zero Carbon Humber aims to make it the world’s first net zero carbon industrial cluster. It is a wonderful example of the Government working hand in hand with the private sector to fund an ambitious endeavour. It is a staggering statistic that H2H Saltend in Zero Carbon Humber can produce more than half the Government’s planned 1 GW of hydrogen by 2025, and is one of the few places in the world where hydrogen, carbon capture and offshore wind congregate to create a “super place”. The towns and villages around Zero Carbon Humber offer opportunities for hydrogen neighbourhood heating trials, essential for decarbonising the heat networks I spoke about earlier.

Around my constituency, steelmaking is a huge carbon emitter, but it is also a huge employer, as it is across the UK. On Humberside, hydrogen can be injected into blast furnaces in the steelmaking process, displacing fossil gasses and producing steam as a by-product rather than carbon dioxide, although any CO₂ is captured and stored. We need that technology in Rother Valley and South Yorkshire to protect our plants and factories and to give British steel the boost it so badly deserves.

I envisage the Zero Carbon Humber project being recreated in Rother Valley, tying in with my plans for a hydrogen valley in my constituency. My hydrogen valley will create high-skilled jobs for my constituents, attract investment and new industries to the area, and decarbonise the towns and cities of South Yorkshire.

ITM has already acted, building the world’s largest electrolyser factory on the border of my constituency and expressing its desire to build large hydrogen refuelling stations across our nation. In that vein, the Government must encourage the development of net zero industrial clusters across the UK. That is a crucial way to revitalise left-behind areas, protect and create jobs, decarbonise polluting industry and help our manufacturers adapt, to ensure that they not only avoid closure but thrive in our green future.

I have so far addressed the UK’s hydrogen economy by sector, demonstrating that we can use hydrogen to decarbonise transport, the gas network and industry. What are the benefits to the British economy of such a hydrogen economy? The Hydrogen Taskforce believes that hydrogen can add up to £18 billion in gross value added by 2035 and support 75,000 additional jobs in every part of the United Kingdom, many of them in the north of England.

Industry, offshore wind and CO₂ storage assets are currently concentrated in the north, meaning that investment in hydrogen production is likely to create and protect more jobs in areas that have been hit hardest by the covid-19 crisis. The existing pipeline of hydrogen production projects has a strong regional spread and will support the Government’s levelling-up agenda. More immediately, the business community has told the Treasury that is has £3 billion of shovel-ready private investment hydrogen projects and is merely awaiting the right policy framework and commitment from the Government.

As the UK looks to bounce back from the covid-19 crisis, investors in hydrogen offer sustainable economic growth opportunities that will kick-start the green recovery. Speeding up hydrogen solutions will allow the UK to build on existing areas of expertise and global leadership. With a value chain that spans production, storage, transmission and distribution, along with downstream appliances, this growing global market can support thousands of jobs in the UK for decades to come.

With the benefits of the UK’s hydrogen economy ringing loudly in their ears, the Government must act decisively and boldly, to steal a march on our competitors and cement Britain’s place as the hydrogen nation. I have already mentioned the absolute necessity of the prompt publication of the forthcoming hydrogen strategy. In addition to that, I have several policy asks of the Minister.

I will first reiterate my policy asks from my hydrogen transport debate, which, unsurprisingly, are still relevant three weeks later. Those were to set ambitious targets for the mass commercialisation of hydrogen technology; to stimulate supply and demand in parallel, focusing initially on regional clusters; and to ensure relevant Government Departments work collaboratively.

However, this debate has a wider scope, so there are additional specific policy asks. Generally, we must ensure that the upcoming hydrogen strategy sets out a clear road map for how the UK will create the renewable hydrogen it needs. We must institute long-term, stable and predictable policy and regulatory frameworks to reassure investors. We must ensure that the Government and Ofgem make decisions quickly and decisively. We must support hydrogen innovation by funding research and development. We should support trials of 100% hydrogen. Government industries should now invest and collaborate to ensure that technology, development and commercialisation take place in tandem.

For transport, we must aim for at least some of the 4,000 zero-emission buses to be hydrogen buses. Most importantly, we must reform the RTFO to allow renewable energy from all sources to be eligible. We must introduce changes to the bus service operators grant to stop discrimination in favour of diesel vehicles, and the Department for Transport must build on the University of Birmingham’s hydrogen train success, by supporting hydrogen train fleet development. Additionally, we must support the opening of 100 hydrogen refuelling stations by 2025, to support the roll-out of hydrogen transport.

For the gas network and home heating, we must support the roll-out of hydrogen-ready boilers for existing homes by 2025 at the latest; outline in detail how the vision for hydrogen towns can be delivered; set out how the gas grid can be repurposed to enable the safe distribution of hydrogen; enable hydrogen to be blended into the gas network; and ensure that the heat and buildings decarbonisation strategy promotes a technology-neutral approach. We must also provide clarity on the business models that underpin hydrogen—for example, carbon capture and storage, pricing and demand mechanisms.

For industry, we need to lay out specific hydrogen production targets, prioritise the reskilling and upskilling of workers, and ensure that there is early decision making on permissions, business models and the role of regulators. I appreciate that this is a substantial policy list, but I hope the Minister will be able to enlighten me about his plans, both verbally during this debate and in writing at a later date.

As I draw to a close, I reiterate that I believe the hydrogen economy will be transformative for the UK. Not only can it decarbonise across all sectors, ensuring that we achieve our net zero target, but it protects industry and retools it for our green future. The hydrogen economy will create skilled jobs in left-behind areas, such as Rother Valley, revitalising parts of the UK that have suffered the grim effects of deindustrialisation.

We have a unique opportunity to corner the hydrogen market, positioning Britain as the world leader in the production and use of hydrogen. That will not only be a shot in the arm domestically as we recover from the coronavirus pandemic, but it will enable UK plc to export our technology and expertise around the world in a post-Brexit age. The hydrogen economy will improve our energy security and resilience, which are critical in light of both the devastating pandemic and hostile Chinese and Russian relations. However, in order to reap these rich rewards, I urge the Government to act now to avoid losing out, as we did with batteries and the wind farm supply chain. We have first-mover advantage, but other countries are waking up; we must be ahead of them.

In a brave new decade with many unknowns, we do know that decarbonising our economy is important for environmental, economic, security and health reasons. Hydrogen can be one part of our energy solution, used in conjunction with other technologies, if we take action now to ensure that the UK’s hydrogen economy works for everyone, and we confirm our place as the hydrogen kingdom.

[Christina Rees (in the Chair)]

Mr Stafford, could you please provide specific details of your declaration of interests for the record?

[Alexander Stafford]

Of course. It is in the Register of Members’ Financial Interests. Until my election to this House in the general election in December last year, I worked for Shell, and Shell has worked on hydrogen; I personally did not work on hydrogen there, but I did work for Shell.

[Christina Rees (in the Chair)]

Thank you.

I do not think there is any need to impose a formal time limit, but if you each speak for about seven minutes, we should be able to get everyone in comfortably.