Energy Infrastructure

Debate between Emma Hardy and Lia Nici

Wednesday 5th July 2023 Commons Chamber

[Emma Hardy (Kingston upon Hull West and Hessle) (Lab)]

It is a pleasure to follow the hon. Member for West Bromwich East (Nicola Richards). I particularly enjoyed her remarks about standing charges, with which I wholeheartedly agree.

I will focus on carbon capture and storage. If we accept that we cannot all cheer for one individual football team, and that there is a need for many different energy producers on the pitch, we have to deal with carbon capture and storage to meet our net zero targets and decarbonise in the way we need to. I realise that many of us would like to move more swiftly towards green energy production but, if we are honest and realistic, we must accept the need for a mix that includes carbon capture and storage. I have severe concerns about the pace and scale of investment into that industry, particularly in the Humber industrial cluster.

For Members who are not aware, the Humber industrial cluster is the biggest carbon emitter in the country because of all the energy-intensive industries that we have there. Back in March, when the Government made their announcement about carbon capture and storage, not a single project in the Humber gained assent, despite that cluster being the biggest carbon emitter. The Government are saying that there will be a new process—the enhanced track 1 process—but, when 80% of the carbon storage facilities are off the east coast and accessible from the Humber, it seems rather illogical not to approve a project in the Humber. That does not make sense for the international businesses that are there, and that is the point.

These international businesses have investments in the US, Norway and Germany. Their boards are not looking particularly at the UK as the place they want to be. They are making an international investment decision. The feedback that I am getting from those different companies is that they are now looking to invest elsewhere. Collectively, those companies are willing to put about £15 billion of private investment into that technology in the Humber. They are saying that the indecisiveness—and the shock and horror that not one of their projects was approved—means that their boards are saying, “Hang on. Why are we looking to invest in the UK when we can go ahead in Germany or Norway, and the US is giving us incentives to carry out work there?” That is extremely worrying for the Humber because, to return to my earlier point, it is the biggest carbon-emitting region in the UK. If we cannot have a solution for the Humber, we cannot have a solution anywhere else.

[Lia Nici]

The east coast cluster track 1 application, of which the Humber was a part, was perhaps not the best way to go. We have the track 1 extension, as well as track 2, where we have very good bids. That will bring that investment. Does the hon. Member agree that we must ensure that the right projects get the go-ahead?

--- Later in debate ---

[Emma Hardy]

It might be worth talking to the companies involved. They are telling me that the indecisiveness means that they might not be looking at the UK as a market to invest in any more.

For Members who are not intimately involved in what is going on in the Humber, there are two possible pipelines out to the North sea: one from Easington on the north bank, and one further along on the south bank. We are looking at both for carbon storage. In my opinion, we need to approve both projects because of the amount of carbon that the Humber emits, but as it stands, neither has been approved by the Government. The companies have not yet been given a fixed timetable on when the Government will see that through.

At oral questions earlier this week, the Minister for Energy Security and Net Zero told me that the Viking project was the “favoured” option, but when I speak to those companies, they say that they have not been told, “This is going ahead, and we are going to fulfil it—go for it.”

[Lia Nici]

The hon. Member is being generous in giving way. I talk with those businesses weekly and that is not the information that I am getting at all. The deadlines are being discussed. Perhaps she and I need to speak so that we can get the full picture, because I think I have a fuller picture than she might have at the moment.

[Emma Hardy]

As it stands, the Government have not approved any of the carbon capture and storage projects for the Humber. They approved one for Teesside back in March, but they have not approved any for the Humber. The information that they are giving out is that they will do so “in due course” and that we will “hear shortly”, which is not the same as actually approving a project.

France, Germany, Hungary and Norway are all moving ahead. Those international companies are making decisions now. Those in the Humber face the real possibility of carbon capture and storage infrastructure not being in place in time, in which case they will have to cease operations. These companies will then begin to move to countries where carbon capture and storage is available. Those looking for a place to invest and meet their targets will not choose the UK. Once we miss this opportunity, they are gone forever. For example, the companies are already signing 20-year contracts with Norway.

Without that infrastructure in the Humber, we will not meet our net zero target. According to the independent Climate Change Committee, the 2030 CCUS and hydrogen targets are essential to meeting that target. The UK has one third of Europe’s geological storage and the infrastructure and expertise from gas and oil companies. We have that huge advantage, but it is not enough.

The main message that I want to put across to Government is that investors and companies need certainty. They need to see unwavering commitments and action from Government. Instead, the outside world sees a slow and piecemeal bidding process that results in the UK’s largest industrial cluster being excluded from the first round.

The decision that was made in March was already delayed by nine months because of the political chaos in Government. These companies are already putting in millions of pounds-worth of investment—[Interruption.] The hon. Member for Hyndburn (Sara Britcliffe) can shake her head all she likes, but I recommend that she goes to speak to these companies. They are telling me that jobs are at risk in the Humber and that the decision was delayed because of the political chaos in Government. Those are the facts. The Government’s indecision is resulting in £15 billion of private investment being put at risk along with the Government’s ability to meet their net zero target. Those are the facts, whether she likes them or not.

Our international reputation is being permanently damaged. When I talk to these companies, they tell me that they no longer trust the UK Government and the UK Government’s ability to keep a promise and fulfil their commitments. That international reputation is essential if we want international investment from those companies.