Representatives from across the East Coast gathered at the Darlington Mercure Kings Hotel to discuss levelling up as a country and moving forward with Net Zero. The panel explored challenges to progress including the role of devolution, decision making, public opinion and harnessing existing skills.
Held in partnership with National Gas, the panel featured:
- Jake Tudge – Chair – National Gas
- Lord Houchen – Mayor of Teesside
- Cllr Amanda Hopgood – Leader of Country Durham Council
- Rt Hon Lord Callanan – Minister for Energy Efficiency and Green Finance
- Alex Cunnigham MP – Shadow Minister and MP for Stockton North
- Ruth Herbert – Chief Executive, Carbon Capture and Storage Association
Building on Existing Resources
Kicking off the discussion, Lord Houchen, Mayor of Teesside said that devolution has played a crucial role in the area’s development over the last six years. As a declining post industrial area, Lord Houchen said a localised approach has allowed the area to build upon existing infrastructure around the River Tees, the chemical and processing industry, and former steel works. He added:
“From an area that was proudly making steel in the 1800s, we can now use those assets to future proof ourselves to move forward with Net Zero.”
Lord Houchen attributed Teesside’s success to its well connected geography, devolved system, and the ability to see market failures, such as the difficulty releasing private sector investment prior to infrastructure being built. Thanks to government funding, Teesside has delivered the world’s largest monopile factory, which has shown the north east as a world leading location.
In order to keep up with the pace of the private sector investment, Lord Houchen said government policy needs to match the speed of development.
Pace of Decision Making and Policy
Alex Cunnigham, Shadow Minister and MP for Stockton North, echoed Lord Houchen’s sentiment, that there is a real pace of change and opportunity for the area. However he reiterated that due to the speed of development and interest in the area, there is disparity between the opportunity and decisions being made to bring projects to fruition.
“Industrialists want to be able to invest here and they want quick decision making – they are annoyed at the slow pace.”
He added that it was imperative to ensure people in the area benefit from its development, and that a level playing field in industry is created.
Alex also mentioned how the UK is lagging behind other countries in Asia and Europe in terms of investment in chemicals. Alongside these concerns, he raised the staggering cost of industrial electricity prices, which are 86% higher in the UK than France and Germany, which puts our companies at a disadvantage.
He added:
“The appointment of a Mayor has helped to make areas work together. This is important. Labour wants to work together across political divides and do the best for Tees Valley.”
Carbon Capture Usage and Storage
Ruth Herbert, Chief Executive of the Carbon Capture and Storage Association, discussed the vital role that CCUS will play in the UK achieving Net Zero. CCUS will process emissions from heavy industry, enabling the use of some liquid fuels during the transition, whilst allowing the production of hydrogen at an industrial scale. This technology also supports the decarbonisation of gas by power stations to offer power back up.
This essential technology creates hydrogen and the high temperatures needed for most industrial processes. Norway has been storing carbon dioxide, previously seen as a waste product, under the seabed for 20 years, and the UK is only just getting started.
Ruth praised the IDC programme, alongside the cluster programme for driving things forward. Again she mentioned how important pace is in terms of final investment decisions – FIDs – and the delays these can cause. Within the UKs two cluster programmes in the north west and north east, Ruth said, her and her team are focused on receiving these FIDs on the 8 projects.
“We cannot have a Net Zero strategy without having an industrial strategy, and we cannot have an industrial strategy without an industrial decarbonisation plan – that is the gap I see.
“We hope the government’s 2024 CCUS Vision will address this and show a plan for the whole UK – without that investors are going to be concerned. On the flip side- there is so much opportunity to secure more jobs and attract green businesses to the UK. The window is closing to provide that plan and secure that investment.”
Rest of North East Lagging Behind
The leader of Country Durham Council, Cllr Amanda Hopgood, a representative of the rest of the north east, said they are 6 to 8 years behind Teesside because of politics.
Again she championed devolution as a vital way to achieve carbon neutral goals, due to the mayor’s role not being diluted by public service provision.
With the North Sea positioned alongside Durham, Amanda said:
“We have huge opportunities in Teesside and the rest of the north east to achieve things for our communities, but we have got to stand above（political） differences.”
The Black to Green project in Durham is a great example of levelling up by building on the heritage of the area to create green energy. The project is exploring how to utilise the area’s coal mines to produce hot water and heating pumps to manage housing estates.
In order to keep moving forward, Amanda stressed that funding needs to be diverted to all areas.
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Government Aims
The Rt Hon Lord Callanan agreed that it is a very exciting time for the north and we are in a clean energy revolution, especially with two of the industrial, power and hydrogen businesses aiming to decarbonise operations being in the north.
He addressed the criticism that more needs to be done in terms of action, saying that the government is “good at strategy” but is taking time to deliver.
However, he drew attention to the CCS negotiation process which has now begun with contracts being awarded in Quarter 3 of 2024 at the latest. The hydrogen allocation round of projects is also due to begin where the government will commit large sums of money to start producing clean electrolytic hydrogen.
Due to the super successful rollout of offshore wind, prices have now come down and added pressure on the supply chain. This is the latest challenge for the UK.
Attracting Investment into the North East
Jake Tudge, discussion chair, asked the panel how Teesside can attract large institutional investors to invest capital in the area.
Lord Houchen said it is important to build a picture for an investor so they can make a clear choice. These reasons include – Teeswork is the largest brownfield site in western Europe, the River Tees has the required depth, and the area is a freeport and is on parity with European partners in terms of exports. To top it off, the mayorships’ close relationship with Redcar and Cleveland Council means they are able to get approval for huge amounts of manufacturing space.
This gives investors the confidence to invest. He added, the government needs to act to improve regulation, as currently investor expectation far outstrips the regulations in place. Lord Houchen urged the government to implement a framework regarding final investment decisions.
Adding to the discussion, Lord Callanan said that planning issues are his biggest frustrations. Judicial reviews take a long time and even if permission is gained, for example for offshore wind turbines, it can be delayed due to residents’ lack of tolerance to the infrastructure on land being built.
Amanda Hopgood agreed that regulations often slow down or negatively impact developments. She said it would help local authorities if planning rules could be implemented that encouraged house builders to put solar panels on homes, as this would speed up the journey to becoming carbon neutral.
Lord Callanan agreed, however he noted that building regulations are changing and the Future Home Standards 2025 will soon mean all new buildings will be carbon neutral.
Avoiding Brain Drain
Finally the panel discussed harnessing the skills of the workforce in the region. Amanda spoke about the need to work collaboratively with the public, private and charity sector to pool resources and provide an equality of opportunity for everyone in the north east.
The need for a skills map to define skills required collectively over the region was also raised. Lord Houchen said that, thanks to devolution, Teesside has been able to streamline the previous 380 providers of education to 24 providers, which has been important.
In terms of a skills framework, Lord Houchen added that when working with individual big investors, the investors can outline the jobs they need and the mayor’s team can fund and commission the relevant courses.
He said, however, it is more difficult to do industry-wide and research is still being done on how to bring the entire supply chain together to achieve it.
He said awareness needs to be raised about the opportunities available within the sector, to attract a diverse workforce and avoid the brain drain, and that it is down to big companies to do that too.
Amanda added that the public sector needs to work with SMEs and education providers to avoid stereotypes, alongside encouraging those in the existing workforce with transferable skills who want to retrain and reskill.
