WARNINGS have been issued that ambitious plans to clean up Grangemouth could be put at risk if funding is instead handed to a similar project in the north east of England – leaving the two industrial hubs fighting over cash.
The chemicals industry has highlighted concerns that without solid business cases being drawn up to decarbonise the UK’s heavy industries, there is a risk “investment goes to assets overseas where more money can be made” instead of remaining in Grangemouth and other British hubs – throwing the long-term future of one of Scotland’s biggest employers into doubt.
The Scottish Government has been told by its statutory advisers to "accelerate" plans to decarbonise Grangemouth if climate targets are to remain on track – while Scottish ministers have appealed to their UK Government counterparts to ensure the Acorn carbon capture site at St Fergus is prioritised as "one of the first two projects to commercialise in the 2020s".
MSPs have pledged to cut 1990 levels of carbon emissions by 75 per cent in just nine years’ time on the way to becoming a carbon net zero country by 2045.
As part of the strategy in the Scottish Government’s climate change plan update, ministers hope to cut the amount of carbon produced from heavy industry, including the Grangemouth cluster, from 11.5 megatonnes in 2020 to 5.5 megatonnes in 2032.
In order to reduce pollution emitted by the chemicals and oil and gas industries at Grangemouth, negative emissions technology (NET) including carbon capture and storage (CCS) – where the harmful gas is prevented from being released and instead trapped in the ground, will need to be used.
But the Scottish Government’s statutory advisors, the Committee on Climate Change (CCC) has called for ministers to “accelerate” plans to decarbonise Grangemouth if the ambitious 75% target is to be met.
In a letter to the Scottish Government, the CCC added: “Similarly, earlier availability of infrastructure for hydrogen and for CO2 transportation and storage, together with accelerated electrification, at the Grangemouth cluster – alongside policy incentives that avoid detrimental impacts on competitiveness – could conceivably bring forward emissions reductions from the 2030s to the late 2020s.
“Bringing these emissions reductions around the Grangemouth cluster six years earlier than we have assumed could, if feasible, provide a further 2 MtCO2e (2.3 percentage points) of abatement.”
The CCC’s chief executive, Chris Stark, has also warned MSPs that plans to scale up a carbon capture project in Aberdeenshire, the Acorn project, could be put at risk by “competition within the UK” - specifically pointing to a similar project being brought forward for industrial decarbonisation in Teesside in England.
READ MORE: Warning over reliance on carbon capture and storage for climate targets
The Net Zero Teesside project aims to decarbonise a cluster of heavy industries as early as 2030 and hopes to deliver the UK’s first zero carbon industrial cluster.
Mr Stark added: “In our assessments, and in the recent UK Government energy white paper, we expect to see only one, or possibly two, industrial sitedeveloped and operational for carbon capture and storage in the next decade, although there will be more after that.
“Again, this is an area in which the Scottish Government needs to lean in. I hope that it is discussing with its Whitehall colleagues the options on how to capture the lion’s share of that planned support.”
Rich Woolley from the UK Chemical industries Association, has told MSPs that “there needs to be a business case for investment”, warning that “it does not stack up for energy-intensive industries because they compete in an international market” – suggesting investment at Grangemouth could be put at risk without certainty over its future.
He added that multi-national companies such as Ineos “would much rather put that money into another country where they could expand operations and make more money”.
Mr Woolley said: “We regularly engage with the Government around trying to get the models to a point where we can get a viable business case together to have energy-intensive industries in the UK rolling out those technologies ahead of the rest of the world.
“However, "The sad fact is that, without that public support, there is no business case for that, so investment goes to assets overseas where more money can be made, rather than low-carbon investment being made in the UK.”
The Acorn CCS project, being brought forward by Pale Blue Dot Energy as part of the Neccus coalition, hopes to be able to not just store carbon from Scottish industries and bring in investment from mainland Europe for overseas carbon.
As well as a solution for the pollution caused by the North Sea oil and gas industry, the Acorn project hopes to transport carbon from Grangemouth along the existing Feeder 10 pipeline as well as it being shipped in via Peterhead Port.
It is hoped the Acorn project could open by 2025 when 2 million tonnes of carbon could be stored a year – being scaled up to 10 million tonnes by 2030.
It is believed talks have been held between companies based at Grangemouth, including Ineos, about pushing the project forward.
An Ineos at Grangemouth spokesperson said: “We are working with many organisations, including the Scottish and UK Governments, and Neccus, an alliance of industry, government and experts, driving the changes and supporting the programmes needed to reduce carbon emissions from industrial sources in Scotland.
“We are committed to ensuring a coherent and joined up approach that reduces emissions while retaining the valuable contribution made by our businesses to the Scottish and UK economies.”
The Scottish Government Energy Minister, Paul Wheelhouse, has written to his UK counterparts, insisting that the Acorn project “must be in the vanguard of developing CCS in the UK”.
A spokesperson added: “The Scottish Government continues to engage positively with Grangemouth companies on a range of energy transition opportunities.
“The development of strategically-located carbon capture utilisation and storage infrastructure in Scotland’s industrial clusters in Grangemouth and the North East could protect and ensure that important domestic industries are able to compete in the future low-carbon world.
“We are already supporting efforts to deploy CCS in Scotland, including providing funding and policy support to the Acorn CCS project in Aberdeenshire.
“It is critical that the UK Government, in their current cluster sequencing process, recognises Acorn CCS as one of the first two projects to commercialise in the 2020s.
“UK funding through the CCS Infrastructure Fund will enable the project to develop and will provide the opportunity to scale up as demand increases.”
READ MORE: The challenge of cleaning up Grangemouth without causing economic ruin
The UK Government has insisted there is enough scope to support four carbon capture projects.
A UK Government spokesperson said: “We remain committed to our ambitious plans to reduce industry emissions across the UK by two-thirds by 2035. We recently allocated £171 million to kickstart decarbonisation of our industrial heartlands.
“In addition, we will invest up to £1 billion to support carbon capture, utilisation and storage projects in four industrial clusters, such as those in Scotland, North East, the Humber, North West and Wales.
“We continue to be in regular discussions with our Scottish counterparts as we work together to tackle emissions from industry.”
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