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To be or not to be for the energy industry

Jan is a guest writer for the Warwick Economics Summit Blog. He studies Economics, Psychology and Philosophy at the University of Warwick.

We all live in a world where the phrase ‘climate crisis’ is quoted regularly by economists, politicians, scientists and activists. The understanding of our critical situation makes a change in our lifestyles necessary. Around the world, people are attempting to live ‘zero-waste’ lifestyles and this trend is becoming more visible among energy companies. Almost all of them pledge to become ‘net-zero’ by 2030-ish. However, while it is easy to believe that your high school friend would change their habits, buy a fancy reusable cup, and restrain from buying a new smartphone, it is less easy to believe some of these energy companies.

These companies also have their tricks, just like fancy coffee cups and wearing second hand clothes. Furthermore, they even have a government to back them and a good story to tell. One of them is an investment in net-zero industrial clusters. The ten-point plan announced this autumn by Boris Johnson made it quite clear in what direction the No 10. will take the UK. Among other investment forecasts, the report points to hydrogen and carbon capture. These two green techniques are already being developed in two places in England. These areas are supposed to become two first net-zero industrial clusters in the world.

What are these net-zero clusters? These are large conglomerates of different industrial sites which are going to conduct highly environmentally unfriendly business as usual, but yet with almost neutral greenhouse-gases emissions thanks mostly to one simple solution: carbon capture. This technology allows some sectors to keep their processes roughly the same, with some optimisation effort. The emissions are going to be captured and transported via pipelines to a safe storage area, where it can be reused in the different production process.

This is a solution so desperately needed by our environment in 2021. There are currently two interesting projects in the UK, which are going to be leading and model solutions for the future: Net-Zero Teesside and Humber. First one, relatively small, is situated in the region which used to specialise in steelworks. Now it is reimagined as one of the most modern industrial clusters in the world. Focused on processing natural gas, and production of hydrogen which is very likely to be the world's next ‘big-thing’. For example, Airbus is reported to be able to construct a prototype of an aeroplane flying using only this type of fuel by 2035. On the other hand, Humber is mostly focused on reworking current business models and making sectors like the steel industry more competitive by having a green advantage. The largest site in the region is also one of the largest pollutants in the UK - the DRAX coal and biomass power station. So the effort in the second area will be related to these existing businesses and the new Equinor hydrogen plant, likely to be operating by 2030.

These projects are likely to receive government funding up to 1 billion pounds funds over the next 10 years as part of the new "10 point plan”. If this, however, looks like a message of hope let’s just remember that the EU is planning to invest 20 times as much every year. Let us be hopeful and wish the UK’s net-zero targets a very happy new year. These two projects which are already a substantial headstart may prove to bring a better greener future to all of us.

The answer to the question: to be or not to be is definitely to be, but different, more agile and determined to change. There will not be a second chance.

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