Industrial Hubs

Is decarbonising Industrial Hubs the answer to a low carbon future?


The UK is the first major economy to halve its emissions, having cut them by 50% between 1990-2022. With renewables now accounting for more than 40% of the country’s electricity, the UK continues its commitment achieving a net zero emissions economy by 2050.

‘Net zero’ means that any emissions are balanced by absorbing an equivalent amount from the atmosphere. This is in response to climate science showing that to halt climate change, carbon emissions must stop — reducing them is not sufficient. Not only does this include the carbon emitted across the UK, but also any goods or services that are imported into the country (sometimes referred to as scope 3 emissions).

Heavy industry is responsible for 14% of the UK’s greenhouse gas emissions — with Wales as a major player of carbon intensive industries, emitting more than 20 million tonnes of climate-warming gases.

However, a significant part of the UK’s emissions reduction since 1990 has been achieved by “de-industrialisation”, i.e. making less goods, “offshoring” these emissions, losing 47% of manufacturing jobs in the same period and making the UK and Wales, more reliant on the import of goods. 

Net Zero Industry Wales is advocating for the uptake of low carbon technologies through the decarbonisation of Industrial Hubs and our CEO Ben Burggraaf, believes that these green Industrial Hubs — operating collaboratively as “Clean Growth Hubs” — could be the answer to a greener future and offer a blueprint for the wider UK.

What are Industrial Hubs?

Industrial Hubs serve as linchpins of industrial collaboration within Wales — creating cohesive local networks that combine efforts to share resources, low carbon energy and infrastructure — to achieve a carbon neutral future. This not only provides an opportunity to sustain the remaining industries in Wales and associated high value jobs, but also provides the environment for further investment, generating growth.

Industrial Hubs are essential cogs in the wheel of Wales’ transition to net zero and form a crucial component of Welsh Industrial Clusters — which includes the South Wales Industrial Cluster (SWIC) and North-East Wales Industrial Decarbonisation Cluster (NEW-ID).

These eco-systems are partnerships made up of cross-sector businesses, from utilities and heavy industry to power generation that support the societal, economic and energy needs within their dedicated regions.

With South Wales ranking as the UK’s second-largest industrial emitter (releasing approximately 16m tonnes of CO2 annually) SWIC, aims to address local infrastructure needs, reduce industrial emissions and achieve net zero targets by:

  • Contributing to a 40% reduction in Welsh CO2 emissions.
  • Retaining 113,000 existing jobs while creating new employment opportunities.
  • Unlocking £30bn in investment opportunities.
  • Growing the £6bn Gross Value Added from South Wales industry.

Industrial Hubs are place-based collaborative projects, based on existing industrial activity in the local area and associated infrastructure. Although aligned with the ‘ways of working’ set out within Wales’ unique Wellbeing of Future Generations Act of 2015, their overall aim to attract investment in low carbon infrastructure, entice new businesses to the area, and generate high-quality, sustainable employment opportunities can provide benefits to the UK.

How do Industrial Hubs play a part in the net zero strategy for Wales and the wider UK?

Industrial Hubs leverage each area’s abundant resources and optimise existing gas and electricity infrastructure to facilitate collaboration, innovation, and sustainability amongst businesses.

All Hubs have the following broad goals which currently support Wales’ wider net zero strategy but can be replicated across the rest of the UK to develop tight-knit ecosystems forming the backbone of the country’s industrial landscape.

The goals include:

  1. To halt deindustrialisation, supporting local growth and greater resilience. By bolstering existing industries and drawing in new ones, Industrial Hubs help to create jobs, diversify products, and increase investments. Plus, they enhance economic resilience by leveraging regional resources, skilled labour, and historical context — thereby maximising benefits for local communities and improving overall quality of life.
  2. To achieve circularity. By identifying connections between processes and different industrial parties (where someone’s waste, can become another’s treasure), Industrial Hubs can uncover pathways to minimise energy and material waste.
  3. To aid the development of new infrastructure. Industrial Hubs direct substantial efforts towards the upgrades, optimisations, and installations necessary to support future, greener power, in many cases the infrastructure connects individual hubs, with others in the wider cluster
  4. To power the transition to low carbon energy. Industrial Hubs are committed to the generation of low carbon energy (electricity, hydrogen) from increasingly renewable sources, supplemented by alternative fuels and abated fossil fuels, to meet the energy needs of industry and other sectors.

An example of a successful Industrial Hub coming to fruition that could be used as a blueprint is the Milford Have Carbon Capture and Storage(CCS) project. As a collaborative, flagship component of SWIC, this project is a partnership between RWE — the largest power generator in Wales — and Dragon LNG — one of the three UK LNG (liquified natural gas) terminals providing energy security into the UK. The project aims to capture CO2 from the power station — which is then transported to the Haven estuary to be liquified at the LNG terminal and then shipped to a CO2 store in either Scotland or the East of England.

The Milford Haven CCS project represents a step change in net zero infrastructure which has the possibility to eliminate CO2 emissions from Wales’ second largest emitter, i.e. the RWE power station using a non-pipeline solution for CCS technology, a first of its kind in the UK. With no geological storage for CO2 within pipeline range, SWIC (13% of the reported UK emissions in scope for UK ETS), still needs to comply with the UK government requirement to decarbonise power generation by 2035. Delivering Milford Haven CCS will help unlock shipping of CO2 as a national opportunity and create conditions helpful for the development of low carbon hydrogen as a fuel of the future.

This initiative, along with many similar collaborations, contribute towards reinforcing Wales’ position as a potential leader in producing sustainable goods and services, strengthening supply chains and fostering circular economy opportunities within Wales’ diverse industries, including steel, cement, paper, and food production.

What is the future of Industrial Hubs?

Long term, it’s expected that Industrial Hubs will directly reduce about 5% of SWIC and NEW-ID’s total current emissions footprint — contributing to Wales’ wider sustainability goals, but indirectly enabling the remaining other 4 “COGS” that drive the decarbonisation of industry (i.e. energy and resource efficiency, fuel switching to electricity and/or hydrogen, carbon capture & utilisation and carbon capture & storage).

However, for Industrials Hubs to kick-start and progress successfully, they require strong private and public sector partnerships to overcome the various legal, technical, economic, environmental, planning and other potential barriers. These partnerships are developed through various local initiatives, such as Innovate UK and Shared Prosperity Fund enabled projects and/or membership through Net Zero Industry Wales.

The concept of Industrial Hubs is replicable beyond Wales into any other part of the UK, to any place that has a concentration of energy intensive commercial and/or industrial activity. However, it will require businesses and local public bodies to “step out” of their comfort zones and tackle challenges like decarbonisation within — rather than across — organisations, and work collaboratively, to maximise the benefits they bring to businesses.    

The overall goal of Net Zero Industry Wales is to empower businesses to deliver change; change which is not only essential in supporting the energy intensive industries that make Wales thrive, but critical in reaching Wales’ and the wider UK’s net zero targets.