Now that the dust has settled following the publication of the manifestos by Labour and the Conservatives, many are looking to see whether there is any greater clarity on their policies on carbon capture, utilisation and storage (CCUS), hydrogen and industrial clusters.

Industrial decarbonisation, CCUS and hydrogen has been one policy area that has seen relatively large-scale government intervention over the last few years. Clusters have emerged across the UK, and started to progress at different speeds. This has been supported by various funding schemes alongside private investment. But it remains early days in this process, and therefore the election comes at a pivotal time for the clusters and these industries.

 

Industrial clusters and CCUS

The Conservative manifesto effectively commits in high level terms. This would continue the mission they have already started on industrial and CCUS clusters.

The manifesto commits to building the first two carbon capture and storage clusters, based across North Wales, the North West of England and Teesside & Humber. This is referring to the HyNet and East Coast clusters which are already being developed at various speeds. Some areas of shared infrastructure progressing through the planning process and individual projects within these clusters advancing through the government’s cluster sequencing phases.

There is also a commitment to further expansion, which again, is a reference to plans by the current government to expand the clusters to cover Aberdeen and Humberside. It’s an area of energy policy under this government where there has already been plenty of state involvement. Nonetheless, industry will welcome the recommitment to this important area. Labour, by comparison, is committing £1 billion to accelerating deployment of carbon capture. It also wishes to invest in storage too, as part of its overall ‘Clean Power by 2030’ pledge. Labour intends to finance these industrial clusters in ‘every corner of the country’ via its National Wealth Fund.

Both parties remain committed to achieving net zero by 2050. Whilst Labour will likely continue with the cluster model, time will tell how they might deviate from existing plans. For example, how would they treat projects outside the clusters, and what other regions would be a priority for expansion?

 

Hydrogen

The home heating debate remains a difficult one for all political parties. Intriguingly, the manifestos do not provide a definitive answer. A bit more light is shed on the approach to industrial hydrogen.

The Tory manifesto only mentions hydrogen once. It does so in relation to a future government helping oversee the Scottish workplace transition to hydrogen, offshore wind, tidal and carbon capture. The current government previously published a hydrogen strategy. In that, it committed to an ambition for 10GW of low carbon hydrogen production capacity by 2030. It has supported a number of projects through hydrogen funding schemes. With this in mind, it is interesting to see this not given prominence in the manifesto.

Labour, however, gives more detail on where it would go on hydrogen. It plans to invest £500 million alone in supporting the manufacture of green hydrogen via its National Wealth Fund. It expects to do this in ‘every corner of the country’, suggesting a hydrogen strategy with a more nationwide focus.

 

Conclusion

Both parties share a commitment to a continuation of industrial and CCUS clusters. The Conservatives focus on Scotland, Wales and the North East, with plans for additional expansion. Industry will be pleased to see that both parties have some consensus on their value. However, a question mark remains over what Labour might do differently if they win on 4th July. Questions also remain about what other regions might come into play outside the existing clusters following a Labour victory.

The Conservatives provided less detail in their manifesto on plans for hydrogen, in spite of previous commitments on raising overall production capacity, which might give industry some pause for thought. Labour provided a more sweeping, costed strategy for green hydrogen. This might give more reassurance for industry on potential expansion in government investment in this field.

One thing is clear: there will be divergences over the scope of industrial and CCUS cluster and hydrogen policy depending on which party wins, but government investment will remain integral for all three areas for the time being.

 

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