The Net Zero North West Cluster Plan Phase 1: Shaping an Industrial Cluster Plan FINAL REPORT AUGUST 2020 PROJECT PARTNERS: Net Zero North West Cluster Plan Phase 1 : Shaping an Industrial Cluster Plan Contents Page Foreword 3 Executive Summary 4 Phase 1 Programme Activity 5 Phase 2 Programme Design 7 1. Introduction 9 Phase 1 Project Partners 10 2. Decarbonising Industrial Production in the North West 11 Why is it important to decarbonise industry? 11 Regional & Sub-regional drivers 14 3. Net Zero NW Cluster Plan – Phase 1 23 Industry Engagement 24 Phase 1 Research 25 4. Phase 1 Business Case Recommendations Summary 32 5. Net Zero NW Cluster Plan – Phase 2 36 Phase 2 – Additional Project Partners 38 Industry and Local Government Collaboration 39 A. Industrial Consumers Workstream 43 B. Networks Workstream 44 C. Generation & Production Workstream 45 An Industrial Cluster Plan 46 APPENDIX A - PHASE 2 WORKSTREAMS ANNEXES ANNEX A – EXISTING ASSETS, EMISSIONS DATA ANNEX B – INDUSTRIAL ZONES ANNEX C – SOCIO-ECONOMIC IMPACTS Net Zero North West Cluster Plan Phase 1 : Shaping an Industrial Cluster Plan Foreword “Home to the industrial revolution, the North West is still a powerhouse of manufacturing and chemical production. Decarbonising our industry is not only vital to the UK’s net zero ambitions but is critical to safeguard and grow the high value jobs that make this region thrive. “Led by industry, Net Zero North West is driving investment into the net zero economy and post COVID-19 green recovery in the North West. Our strength lies in the unrivalled number of initiatives already happening on the ground which offer sustainable investment opportunities in net zero and will see this region become a world leader in clean growth. “The North West has all the elements required to deliver a low carbon industrial cluster by 2030. Backed by industry, by regional leaders and by business we can deliver at speed and make a real contribution to net zero targets. “The roadmap and cluster plan are important parts of the journey, setting out for the first time a coherent vision for industrial decarbonisation. We are ready to rise to the challenge and deliver long lasting benefits for the region and beyond.” Ged Barlow, Executive Director, Net Zero North West: 3 Net Zero North West Cluster Plan Phase 1 : Shaping an Industrial Cluster Plan Executive Summary i. Net Zero North West is aiming to develop the UK’s first low carbon industrial cluster by 2030. Led by industry the cluster is driving investment into the net zero economy and post COVID-19 green recovery. This will create at least 33,000 jobs and see over £4bn invested in the region. The cluster will make a significant contribution to the UK’s legally binding target to reach net zero carbon emissions by 2050, as well as local net zero carbon targets for Greater Manchester (2038), Liverpool City Region (2040) and Cheshire West and Chester (2045). ii. The Net Zero North West Cluster Plan (also known as the Cluster Plan) will set out a coherent vision for industrial decarbonisation in the North West of England and North East Wales. It will describe the investments, technologies, infrastructure changes and sequencing required to fulfil the UK’s Industrial Clusters Mission and deliver a transition to net zero. The project focuses on two key objectives: Establishing a low-carbon industrial cluster by 2030, by deploying anchor investment projects including HyNet hydrogen and Carbon Capture, Utilisation, and Storage (CCUS) infrastructure Establishing a net zero carbon industrial cluster by 2040, underpinned by multi- vectored industrial decarbonisation solutions iii. The North West boasts the largest concentration of advanced manufacturing and chemical production in the UK and is home to a concentration of energy intensive users. The region of North Cheshire alone uses 5% of UK power. The largest industries in the cluster account for over 6 million tonnes of carbon emissions per year, from diverse facilities that include oil refining, downstream processing, cement, fertiliser production, glass manufacturing, base chemicals, food manufacturing, automotive, and personal care products. Further industrial emissions are associated with other industry across the broader NW region, extending up to Lancashire and Cumbria. Several manufacturing and light industrial businesses reliant on energy intensive processes are located in business parks with the potential to employ shared infrastructure, including heat networks, smart grids and decentralised generation. Net Zero North West This newly launched body will act as an industry voice sponsoring the creation of the Cluster Plan and includes representation from energy intensive industry and local government. Its role will be to promote investment in the decarbonisation of industry and to represent the Cluster outside the region. 4 Net Zero North West Cluster Plan Phase 1 : Shaping an Industrial Cluster Plan Phase 1 Programme Activity iv. This report summarises the work undertaken during Phase 1 to shape the creation of a cluster plan at Phase 2. Findings from Phase 1 are included in the main body of the report. Outcomes from Phase 1 are: Industry Engagement v. Led by North West Business Leadership Team and supported by Cheshire Energy Hub and Peel L&P Environmental, outreach activities included: Engagement with energy intensive industry through regional forums Online promotion of the activity, inviting organisations to express interest Engagement with business networks through regional forums Engagement with project developers, network operators, academic researchers Engagement with North West LEPs and North Wales Economic Ambition Board Creation of Net Zero North West as a sponsor of the Cluster Plan and an industrial engagement strategy to be delivered during Phase 2. Research Activity vi. Progressive Energy Limited researched and delivered a summary report (Annex A), detailing: CO2 emissions data, identifying and mapping 95% of sources of industrial carbon emissions in the Cluster geography, delivering a database for use in Phase 2 Review of significant industrial cluster projects, with recommendations as to how these could be considered in an energy infrastructure model at Phase 2 Recommendations for alignment of the Cluster Plan with IDC Deployment at Phase 2 vii. Local Energy North West Hub researched, with support of consultant Burro Happold, Approaches to GIS mapping business sector and energy data, delivering an Energy Data Recommendations Report Review of 14 infrastructure opportunities at strategic industrial zones, delivering an Industrial Energy Zones prospectus (Annex B). 5 Net Zero North West Cluster Plan Phase 1 : Shaping an Industrial Cluster Plan Figure 0.1 below shows the locations of major sources of carbon emissions from industrial production, and the density of emissions across the geography and the breakdown of emissions by sector. Figure 0.1: Industrial Carbon Emissions and Installations Source: Industrial Cluster Research Phase 1 6 Net Zero North West Cluster Plan Phase 1 : Shaping an Industrial Cluster Plan Business Case viii. Cheshire and Warrington LEP, with support of consultant Hatch Regeneris, delivered an Industrial Cluster Strategic business case recommendations report and assisted the preparation of this report. ix. The University of Chester liaised with academic institutions and the Industrial Decarbonisation Research & Innovation Centre (IDRIC) to deliver a review of the wider benefits and socioeconomic impacts of industrial decarbonisation in the North West (Annex C). Programme Outputs x. Peel L&P Environmental supported the programme as Project Lead and with Local Energy North West Hub (Growth Platform) acting in a programme management role, co-ordinating research findings. xi. Final outputs were accompanied by a project exploitation plan and an Industrial Cluster Plan Phase 2 Application. Phase 2 Programme Design xii. The Net Zero NW Cluster Plan will define the steps necessary to mitigate carbon emissions from industrial production to net zero by 2040. It will articulate how the HyNet Deployment project and other activity will come forward in the next decade to achieve significant reductions in industrial carbon dioxide (CO2) emissions, including but not limited to: The contribution that CCUS can make to decarbonising industrial process emissions across the cluster geography Supply of hydrogen from dedicated anchor network infrastructure to enable fuel switching in the energy intensive industries contributing the majority of emissions by 2030 Supply of hydrogen to foundation and manufacturing industries where practically and economically feasible to do so, including distributed hydrogen supply to installations remote from the planned hydrogen pipeline network Quantify the proportion of total emissions to be mitigated through different scenarios over time Consider how increasing amounts of ‘green’ hydrogen can be produced from a range of sources and supply this networks infrastructure Consider the medium and long term opportunities and constraints upon the storage of hydrogen and sequestration of carbon xiii. The Cluster Plan will identify the need for additional infrastructure and develop a timeline for investment that considers the interaction of different solutions. It will consider: Future scenarios: Total regional demand for energy and energy mix by 2040 Baseline: Scenarios for the growth, contraction and transformation of industry Consumers: The impact of energy efficiency and investment