Decarbonising industry, among other hard-to-abate sectors, is a high priority in the UK as the country embarks on a pathway to net zero greenhouse gas emissions by 2050. The government’s focus to date has been on the decarbonisation of large-scale energy-intensive industries. However, more than a fifth of the UK’s carbon dioxide emissions come from small and medium-scale industrial emitters who face an uphill struggle in their transition to net zero. In this article, Dr Vincenzo Spallina and Professor Maria Sharmina explore the role of hydrogen in helping smaller industrial emitters to decarbonise.

• Some small industrial emitters can decarbonise through circular economy principles, whereas others need energy supply focused solutions.
• The RECYCLE project demonstrates great potential for low carbon hydrogen in the UK, which will have implications for industrial stakeholders, including small industrial emitters, though barriers remain.
• To make the energy transition affordable for all industrial emitters, technological and infrastructure barriers will need to be addressed by policymakers.

Who are small industrial emitters?

Small industrial emitters are widely distributed across the country, sometimes remotely located, and their businesses span chemical, mineral, cement and lime, food and the commercial and public administration sectors. In each case, their annual emissions are usually under 150,000 tonnes of carbon dioxide.

Some of those emitters can reduce their energy demand through circular economy principles such as reuse of waste products and waste energy recovery, which could be encouraged by the government through awareness campaigns and reduced UK ETS (Emission Trading Scheme) carbon pricing. However, others will need energy supply focused solutions to support their efforts to decarbonise.

How can small-scale emitters decarbonise?

Small industrial emitters face several barriers to reducing their emissions, including cost, limited in-house expertise, and safety concerns associated with the process’s complexity. For emitters not located in major industrial clusters, transporting carbon dioxide could mean prohibitive costs to pay for ground piping or road transportation.

Options for small industrial emitters include renewable electrification, hydrogen, and biomass-to-energy. Technical viability, geographic availability and the wider environmental impacts of these options will mean they are not suitable for all businesses.

For emitters that require primarily low-temperature heat, electrification could be the preferred option. However, renewable electricity needs infrastructure for production, transmission and distribution.

Work undertaken as part of the RECYCLE project at The University of Manchester demonstrates that there is great potential for low carbon hydrogen in the UK, with implications for industrial stakeholders, including small-scale hydrogen end users. While this pilot is ongoing, it is thought that where electrification is not possible, the only viable options to decarbonise those industrial emitters would be through either hydrogen from biomass or carbon capture and storage (CCS).

CCS refers to the removal of carbon dioxide from industrial processes so that gases are not released into the atmosphere. The captured carbon dioxide is of high purity and can be sent for permanent storage or used in other chemical process. In the UK, the target is to capture at least 70 million tonnes annually by 2050, if we are to meet the Paris Agreement goals, primarily in the recently established industrial clusters across the country.

Production of hydrogen by using electrolysers at the gigawatt (GW) scale faces challenges similar to renewable electricity, as it will require a larger electrical grid than we have currently. What’s more, continuous production of electricity-based hydrogen would need additional investment in energy storage because renewable energy varies with time and season.

Supporting the transition to net zero

To make the transition affordable for small industrial emitters, technological and infrastructure measures will need to be facilitated by public policies. Such measures include: implementation of non-electric production of hydrogen; retrofitting of small industrial emitters to accommodate carbon capture; and coordination of transport for both hydrogen feedstock and carbon dioxide.

Non-electric hydrogen production, such as biomass gasification and waste-to-hydrogen plants, can be carbon-neutral thanks to using biomass as a feedstock. In addition, small-to medium-scale blue (i.e. natural gas based) hydrogen production can provide energy for those emitters that cannot transport carbon dioxide to large CCS clusters. Both options would reduce the risk of intermittent hydrogen, relieve the burden on the electrical grid, and can operate in the medium term before other low-carbon infrastructures are deployed at scale.

To complement non-electric hydrogen, strategically located medium scale ‘carbon hubs’ are needed to coordinate taking captured carbon dioxide from small industrial emitters and transporting it to large CCS clusters. Any transportation itself would need to be low-carbon, for example through hydrogen-based heavy goods vehicles.

Government and relevant local authorities could co-fund retrofits for the place-based manufacturing processes, while a third party would collect and transport purified carbon dioxide. This arrangement would be similar to how local authorities deal with municipal waste by outsourcing its collection and processing to specialist waste management firms. The funding could come from the ringfenced carbon levy collected through the UK’s carbon border adjustment mechanism.

To optimise infrastructures and resources (e.g. electricity, hydrogen, and biomass) for the medium-scale carbon hubs, locations of small industrial emitters, electricity transmission and distribution, and transport links would need to be mapped. Such a mapping exercise could be co-funded by the Government either through UK research councils or through a tender.

Policy recommendations

Several policies would speed up the decarbonisation of small industrial emitters:

• Expand the Industrial Decarbonisation Challenge competitions to include deployment and cluster plans for small industrial emitters.
• Require the recently established large industrial clusters to attract, train and host experts, tasked with providing small industrial emitters with expertise in decarbonisation and related safety matters.
• Bring forward the implementation of the carbon border adjustment mechanism from 2027 to 2025, to level the playing field with imported manufactured goods sooner. The carbon levy can be phased in early, starting with the most carbon-intensive goods only (such as steel) and expanding the list of goods each year.
• Fund research and modelling to compare potential electricity-based vs. hydrogen-based and carbon-capture supply chains for decarbonising small industrial emitters.
• Aligned with the carbon levy, introduce progressively tightening emission standards for heavy goods vehicles within these supply chains, to avoid carbon emissions from transportation.
• Reduce UK ETS (Emission Trading Scheme) carbon price for reused and recycled industrial inputs, as part of encouraging a circular economy approach. Any reuse and recycling should be accompanied by life-cycle assessment to ensure that reuse processes themselves do not unintentionally increase carbon emissions.
• Sponsor a large-scale public and business awareness campaign about maintaining, repairing and the durability of goods (calling out wasteful practices like planned obsolescence), thereby reducing demand for industrial production.