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El Dorado on Tees

Tuesday 11 May 2021

Will the Net Zero Teeside project, focused on carbon capture, usage and storage, amount to anything serious?


In the end the outstanding individual performance of last week’s local UK elections was by Ben Houchen, re-elected as mayor of Tees Valley with 73 per cent of the vote. He crushed it, mainly by talking endlessly about jobs. Houchen is an oval-faced rising Tory star who made sure Teesside topped the government’s list of free ports – whatever they turn out to be – and pinned his colours to a hugely ambitious net zero project called Net Zero Teesside. It’s a project that will be talked about a lot between now and COP26. Whether it amounts to anything post-conference is another matter.

The promise. The aim is a breakthrough in CCUS or CCS – carbon capture, usage and storage – which has been the big polluters’ favourite get-out-of-jail-free card for more than a decade. The government calls it a First of a Kind (FOAK) technology and wants to build a cluster of carbon-intensive plants that depend on it on the site of the disused Redcar steelworks at the mouth of the Tees. If it works there will be: 

  • Europe’s first large-scale commercial carbon capture scheme offshore, where CO2 separated from industrial waste streams will be pumped into cavities left by North Sea oil and gas exploration, and left there;
  • innovative carbon usage onshore, including at a new BP natural gas reformation plant to produce “blue” hydrogen for industrial use, which is not as clean as green but can still be net zero in carbon terms if the CO2 produced is buried (see above);
  • a magnet effect drawing other carbon-intensive industries to Teesside with the promise of full CO2 capture and storage and all the reputational and financial benefits that should accompany it as the energy transition progresses;
  • tens of thousands of new jobs in a left-behind part of the UK, and a big share of a global CCUS industry that upbeat Whitehall documents say could be worth £200 billion a year by 2050.

The catch. Large scale CCUS at Teesside has been mooted for years and never taken off. Even if it does now it will not shrink the UK’s overall carbon footprint by one molecule unless it includes factories burying their emissions that had previously been releasing them

And the economic benefits of the scheme are based on a CCUS “supply chain” that gets 55 mentions in a new Whitehall roadmap, but which does not yet exist. 

There are reasons for this:

  • Cost. The UK is probably the best place in the world to try commercial CCUS because it has pipelines and depleted wells in place and carbon-emitting plant on the east coast ready to fill them, says Oxford’s Professor Dieter Helm. Even so, plans drawn up since 2007 to subsidise the process have never reached fruition. “Why? Because it is so expensive.” 
  • Four of the five biggest CCS projects in the world have been built by oil and gas companies not primarily to store carbon but to repressurise depleted deposits to get more fossil fuels out of the ground, a process known as EOR (enhanced oil recovery):
  • Complexity. “Collecting CO2 from power generation and industrial processes is proving more difficult than the proponents suggest,” says Chris Goodall, editor of Carbon Commentary. “It is really very far from clear that CCS has any substantial role.”
  • Politics. £330 million of public funds were invested in CCUS R & D between 2004 and 2019 without any commercial schemes getting beyond the drawing board. Another £52 million has been promised for Teesside and £171 million in all nationally for CCUS, but this is still for further planning rather than building, and not with long-term subsidy in mind. On the contrary, the roadmap says: “the government cannot itself create a UK CCUS supply chain”. It has to be a “collaborative endeavour”.
  • Caution. For all Houchen’s enthusiasm, Net Zero Teesside itself has not yet submitted a formal application to the planning inspectorate, although this is supposed to happen soon. BP is a potential collaborator but won’t be making a final investment decision on its blue hydrogen project until 2024. 

That will be a crucial decision. Without a big commercial partner like BP the only way a project like Net Zero Teesside could pay for itself would be by selling offsets at a far higher price per tonne of carbon than currently exists, Helm says. And without projects like Net Zero Teesside there’s not much future for CCUS as a route to net zero. 

On the plus side, if it does happen it will be a genuinely world-beating advance. And if it doesn’t, there’s always wind, green hydrogen and reforestation, which many voices outside carbon-intensive industries and the current government say should have been the priority all along.


Science and Tech

More trees please (see above)
The idea of trees as a climate panacea was controversial even before the Crowther Lab’s crowd-pleasing 2019 study that suggested climate change could be sorted with a trillion more of them – and that nearly a billion hectares were available on which to plant them. The land wasn’t at the right latitude for high volume carbon sequestration, we were told. If we put too much trust in trees we wouldn’t focus hard enough on cutting emissions. And we’d create bad monocultures. Now the Trillion Trees Project (which has nothing to do with the Crowther Lab) says 59 million hectares of forest have in fact grown back since 2000, enough to absorb a year’s worth of US emissions. They include 4.2 million hectares of Brazil’s Atlantic forest. At the same time, Politico reports, the Brazilian Amazon lost 4,000 square miles (1m ha) between 2019 and 2020 alone. What to conclude? Tree cover can expand and shrink at the same time. What really matters is contiguous tropical rainforest and that, alas, is shrinking.


Policy

Defra’s dodge
Last week in the Sensemaker we mentioned a mini-scoop by The Times’s Oliver Wright, who found out that the Department for the Environment, Food and Rural Affairs didn’t have a net zero plan of its own. This was in violation of instructions to all Whitehall departments from Number Ten. It was also a bad look for the UK’s closest thing to an Environment Ministry in the year the UK is hosting COP. We assumed they’d fix it quickly. Did they? They told us they didn’t comment on leaks. We’ll take that as a no.


Engagement and Activism

Aux barricades!
Can citizens’ assemblies produce workable climate policies where parliaments fail? It’s not obvious that they can. So far in the UK they’ve been little more than cathartic talking shops without leverage at Westminster. France tried harder. 150 citizens worked for months to feed practical proposals into a climate bill that includes a ban on short-haul flights for which there is an alternative by train that takes two and a half hours or less. But the bill is blocked in the Senate and President Macron is accused of diluting it. Protesters in Paris and elsewhere on Sunday called it a climatic and social failure. They should not expect Macron to lean too far their way as he woos the Right before next year’s election.


Eco-nomics

Copper mountain
Here’s an odd one: Goldman Sachs predicts the price of copper will rise by nearly half to $15,000 a ton by the middle of the decade as EVs take the world by storm (copper wire and permanent magnets being the basic ingredients of electric motors). Despite this the overall cost of EVs is expected (by Bloomberg New Energy Finance) to fall dramatically so they’re cheaper than petrol cars by 2027. That is eight years before most European countries start banning sales of new ICE-powered cars. Two lessons: economies of scale are remarkable things, and industry reacts fast to the mere warning of new rules. 

Do share this around and let us know what you think of it.

Giles Whittell
@GWhittell

Illustration by Julia Allum


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