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.
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.
First of all, may I apologise on behalf of the Minister who was going to respond to the debate, as both she and I were detained?
I congratulate my hon. Friend the Member for Rother Valley (Alexander Stafford) on securing this important debate. Not only in this debate but throughout his time in Parliament, he has championed this issue and similar issues, and I congratulate him, once again, on being at the forefront of the debate on these issues.
It is indeed London International Shipping Week and, as my hon. Friend has said, we are “Nelson’s nation”, so this debate is incredibly timely. The shipping of carbon dioxide and hydrogen can play an important role in ensuring a prosperous and sustainable future for British industry, and in supporting efforts to meet our domestic net zero targets.
We have already made huge progress in decarbonising the electricity sector. In 2019, greenhouse gas emissions were down by 13% on 2018 levels. However, it is right to say that, in order to reach net zero emissions by 2050, we must go further. That is why in March we published the UK’s industrial decarbonisation strategy. This document is the first to be published by a major economy and it sets out how industry can decarbonise in line with net zero while remaining competitive. Carbon capture, utilisation and storage, or CCUS, is one key abatement technology and it will be vital as we make this transition.
In May, we launched phase 1 CCUS cluster sequencing process. Its aim is to provisionally sequence those clusters that are most suited to deployment in the mid-2020s. This summer, we also published the UK’s first ever hydrogen strategy, which will put the UK at the forefront of the race to develop low-carbon hydrogen, driving innovation, jobs and investment to scale up the technology. CCUS and low-carbon hydrogen are vital to transform sectors such as steel, cement and chemicals, which lack viable alternatives to achieve deep decarbonisation. The UK can become a world leader in CCUS and low-carbon hydrogen, helping to create world-leading low-carbon manufacturing clusters. Connecting industrial clusters, such as those in south Wales, the south coast of England, the Thames estuary and the firth of Forth in the north-east of Scotland will be critical to enabling the decarbonisation of our steel, chemical and refining industries. That is where the shipping sector can be crucial in realising that vast potential. In our business model update, published in May, we indicated our desire to accommodate the shipping and the non-pipeline transportation of carbon dioxide and, as part of the cluster sequencing process, we asked clusters to include details of future carbon dioxide shipping capability in their cluster sequencing proposals.
4:17 pm
Sitting suspended.
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 CO2from 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 CO2. 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 need to 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.
Turning to the future direction, we recognise the importance of non-pipeline transportation and shipping for decarbonisation of the broader economy and allowing deep decarbonisation. We are currently working with industry and the devolved Administrations to understand how best to incorporate non-pipeline transportation and shipping within a UK carbon dioxide network.
This is an extremely important issue for the sector, but more importantly, for the planet. I apologise for missing the beginning of the speech by my hon. Friend the Member for Rother Valley, and I make a commitment that if there is any point that he raised in my absence, the Minister will address it directly in writing and leave a copy in the Libraries of both Houses. This is an extremely important issue, and I endorse my hon. Friend’s view that shipping will play an important role in reducing carbon dioxide emissions. I look forward to working across the House, and with the Minister, to ensure that the UK develops the appropriate infrastructure to enable new low-carbon technologies such as low-carbon hydrogen, and meet the challenges that we face.