Process Industry Pressing Ahead with CSS Network Plans; Some of the Region's Major Energy-Intensive Industries Are Backing a PS1bn Drive to Develop a Carbon Capture and Storage (CSS) Project Which Could Help Save Thousands of North East Jobs - and Create Many Thousands More. PETER McCUSKER Reports

The Journal (Newcastle, England), January 29, 2014 | Go to article overview

Process Industry Pressing Ahead with CSS Network Plans; Some of the Region's Major Energy-Intensive Industries Are Backing a PS1bn Drive to Develop a Carbon Capture and Storage (CSS) Project Which Could Help Save Thousands of North East Jobs - and Create Many Thousands More. PETER McCUSKER Reports


Byline: PETER McCUSKER

TEESSIDE'S chemical and process industry cluster is key to the regional economy, supporting 20,000 jobs, and with a total GDP of PS10bn it contributes over half of the region's total exports.

But regulations are increasing the price of the energy it uses and forcing it to pay increasing amounts for the carbon it emits.

Many of these businesses are also under increasing pressure from multi-nationals such as Coca-Cola looking for their supply chains to demonstrate a tangible commitment to a low-carbon economy.

There is growing concern that these decarbonisation pressures are putting Teesside and the rest of the UK and Europe's process sector at a disadvantage.

This is acutely demonstrated by the advantages United States industry has gained through its shale gas revolution.

Gas prices for industry fell by 66% in the US between 2005 and 2012, while they rose 35% in Europe over the same period, according to the European Commission Consequently Teesside's leading process industry companies are working together to devise an industrial Carbon Capture and Storage network, working through the North East Process Industries Cluster (NEPIC) and an industry-led group known as the Process Industry Carbon Capture and Storage Initiative (PICCSI).

In a bid to support this Tees Valley Unlimited (TVU), the local enterprise partnership for Tees Valley, has won PS1m from the Government under its City Deal initiative to put together a case for an industrial CCS system.

Sarah Tennison, TVU low carbon economy manager, said: "Process and chemical companies have invested heavily in energy-efficiency measures and there is little more they can do in this direction.

"Where emissions of carbon dioxide are an inherent part of the process, a real step change can only be made by implementing carbon capture and storage. At the moment the cost of carbon is quite low but the expectation is that carbon costs will rise over the coming years, increasing business costs."

"The development of a CCS system on Teesside will secure the future of the process sector and also allow us to attract new businesses into the area to take advantage of this infrastructure."

A number of Teesside's high carbon dioxide emitters including fertiliser manufacturer GrowHow, acrylic manufacturer Lucite, steel-maker SSI and industrial gas firm BOC are supporting the CCS network plans.

These are all large energy users and high CO2-emitters and have crucial roles in the regional and national economy. GrowHow produces 35% of the UK's fertilisers, BOC produces feedstocks for many neighbouring firms, Lotte produces plastic for companies such as Coca-Cola, and SSI is the second largest blast furnace in Europe.

Up until the end of 2012 all carbon emitters were give free carbon credits under the EU Emissions Trading Scheme but from 2013 emitters have had to pay for carbon credits with carbon currently being traded at five euros (PS4.10).

The amount of free credits decreases over time and the European Steel Association says that even the most efficient of steelmakers will have to buy up to 30% of their needs in emission permits by 2020.

When the EU carbon market was launched carbon was being traded at $30 a tonne, but has since fell as economic and industrial activity declined during the financial crisis.

But late last year the European Commission agreed to withhold the release of further carbon credits in a bid to force the price back up towards $30.

Some of the larger users such as Sembcorp and SSI, which generate their own energy, from a separate fuel plant - in the case of SembCorp mainly biomass and SSI coal - they have an additional cost for carbon through the Carbon Floor Price.

TVU eventually want to see additional Teesside-based companies join the CCS network and hope it will attract new industrial businesses to locate to the region to take advantage of the low-carbon infrastructure. …

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Process Industry Pressing Ahead with CSS Network Plans; Some of the Region's Major Energy-Intensive Industries Are Backing a PS1bn Drive to Develop a Carbon Capture and Storage (CSS) Project Which Could Help Save Thousands of North East Jobs - and Create Many Thousands More. PETER McCUSKER Reports
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