UK could be at forefront of green Industrial Revolution with carbon cluster plans – and here’s why

Published

1 year ago

December 30, 2023

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If you crack open a bottle of something – be it wine, water or soft drinks – over the festive season, there’s a good chance the glass came from the Encirc factory in Cheshire.

Here, on the banks of the River Mersey, you will find one of the world’s largest glass factories. They take sand from Norfolk, soda ash created from the salt sitting beneath the Cheshire countryside and a lot of recycled glass and throw it into two of the biggest glass furnaces in the world.

There, in the furnace, at temperatures of around 1,600 degrees centigrade, the sand melts and becomes a liquid river of molten glass. It is a chemical reaction humans learnt thousands of years ago, but here at Encirc it’s carried out on a gargantuan scale.

This factory alone produces two billion bottles and containers a year, a number which is hard to process, until you note that it includes around 40% of all the wine bottles consumed in the UK.

That includes a significant proportion of all the New World wines we consume here, by the way. Mostly, the wine from Australia, California and Chile arrives not pre-bottled, but in large bags inside shipping containers, which are then emptied into metal vats at Encirc, from where they are pumped into bottles made here in the UK.

It’s an extraordinary site – a place which says a lot both about our appetite for liquids (both alcoholic and not) and our ability to turn raw materials into sophisticated products.

The struggle to get to net zero

But turning sand into glass is an enormously energy intensive process. Some of the heat in the furnace can be created by electric elements which heat the bottom of this enormous oven. But glassmakers like Encirc say it’s impossible to do what they do – making glass on a vast scale – without blasting that furnace with a very hot flame.

At the moment that flame is produced using methane – natural gas – with the upshot that this glassmaking facility produces rather a lot of carbon dioxide. And even if you could find a way of running their furnace without a naked flame it would still be producing a sizeable amount of CO2, since some of it derives from the chemical reaction as sand turns into glass.

In short, this glass factory is a pretty good illustration of how tricky it is to get to net zero. Much of the energy use in this country can be shifted from fossil fuels to green electricity – whether that’s vehicles or home heating. Sometimes the cost will be high; sometimes in the long run, going green will be cheaper than the status quo.

But for a handful of important industries it’s far, far harder. Glassmaking is one of those industries. You can run small furnaces on electric power but not the big ones you need to feed a massive glass container factory like this one.

All of which is why they are seeking another alternative. The most obvious route to allow this plant to decarbonise is to replace those methane flames with hydrogen ones, and then to collect all the CO2 coming out of the chimney and sequester it below the ground.

And, as it happens, the technology is pretty much there. We know how to make hydrogen both from natural gas and from electricity (the former still involves some carbon emissions; the latter is extremely expensive, so these options are not without their issues). We know how to capture carbon dioxide.

But there’s a couple of problems which have always deterred businesses like this from taking the leap. The first is that it hasn’t made any economic sense. Capturing carbon is expensive, so why do it when it’s cheaper to pay for carbon credits and carry on burning gas?

Location, location, location

The second is that the infrastructure isn’t yet there. Right now if you collected carbon dioxide from your chimney, there’s nowhere to put it. Someone needs to lay the pipes out to the depleted gas reservoirs under the sea where we might be able to store it. That’s also expensive.

All of which brings us to one of the least discussed, but arguably most important topics in the green energy transition: clusters. In short, if businesses like this glassmaker are going to green it is far more likely to happen if they can do so alongside other heavy industry players.

Look at the geography of the UK’s industries and the idea makes quite a lot of sense. Many of the country’s biggest polluters happen to be clustered relatively near each other on the coast. Alongside Encirc you’ll find one of the country’s biggest oil refineries, as well as the Inovyn (part of Ineos) chemicals plant, not to mention a major gas power station and, some miles further away in North Wales, a cement manufacturer.

All of these businesses have big energy demands. They would all benefit either from carbon capture or hydrogen. Squint a little bit into the future and you can envisage a world where they share pipes both taking the carbon away and delivering the hydrogen.

How to make it happen?

But how to create these clusters? How to finance them? How to coordinate the businesses that all want to make profits while fulfilling their commitments to reduce or eliminate their carbon emissions?

It’s a question no one has yet been able satisfactorily to answer, but whoever does will have that most precious of things: a blueprint about how to decarbonise the trickiest bit of the world’s carbon budget.

And guess what: it so happens the UK is further ahead of most other countries around the world in planning its blueprint for clusters. It now has detailed plans for how to fund, construct and run a series of major clusters: one around the Encirc factory (the Net Zero North West Cluster Plan), another in the Tees Valley (Tees Valley Net Zero), as well as plans for Scotland, for the Humber, for the Black Country and South Wales.

An area where the UK is genuinely leading

Thanks in part to government funding, which began in 2019, Britain’s clusters expertise is admired far and wide. While the US is widely seen as having taken the lead on industrial decarbonisation, thanks to its enormous Inflation Reduction Act set of subsidies, Americans – and many from Europe – have been regularly visiting the UK to understand how to do clusters.

There are many areas where UK politicians claim (without much basis) to be world leaders, but here is an area where it does actually have a world-beating proficiency. However, the government funding for clusters is coming to an end in March, and those working here are nervous that this could be another area where the country squanders an early lead and soon becomes a laggard.

While the cluster in Cheshire looks likely to become a physical reality, with companies soon laying the pipes that will connect plans to hydrogen and carbon dioxide pipes, those in the Black Country and elsewhere are much less advanced.

It’s something to ponder as you have a drink over the festive season. It’s tempting to assume that Britain no longer makes much of anything any more. However, visit plants like the Encirc one, and you realise that that is very far off the mark.

And there’s a prospect that this country, which brought the world the Industrial Revolution, could be at the forefront of managing the green Industrial Revolution. In a few years’ time that glass could be truly low carbon – maybe in due course it could be zero carbon. But it will take a lot more work – especially on clusters – to make it a reality.

Business

Rachel Reeves ‘a gnat’s whisker’ from having to raise taxes, says IFS

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1 hour ago

June 13, 2025

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Rachel Reeves 'a gnat's whisker' from having to raise taxes, says IFS

Rachel Reeves is a “gnat’s whisker” away from having to raise taxes in the autumn budget, a leading economist has warned – despite the chancellor insisting her plans are “fully funded”.

Paul Johnson, director of the Institute for Fiscal Studies (IFS), said “any move in the wrong direction” for the economy before the next fiscal event would “almost certainly spark more tax rises”.

‘Sting in the tail’ in chancellor’s plans – politics latest

Speaking the morning after she delivered her spending review, which sets government budgets until 2029, Ms Reeves told Wilfred Frost hiking taxes wasn’t inevitable.

“Everything I set out yesterday was fully costed and fully funded,” she told Sky News Breakfast.

Her plans – which include £29bn for day-to-day NHS spending, £39bn for affordable and social housing, and boosts for defence and transport – are based on what she set out in October’s budget.

That budget, her first as chancellor, included controversial tax hikes on employers and increased borrowing to help public services.

Chancellor won’t rule out tax rises

The Labour government has long vowed not to raise taxes on “working people” – specifically income tax, national insurance for employees, and VAT.

Ms Reeves refused to completely rule out tax rises in her next budget, saying the world is “very uncertain”.

The Conservatives have claimed she will almost certainly have to put taxes up, with shadow chancellor Mel Stride accusing her of mismanaging the economy.

Taxes on businesses had “destroyed growth” and increased spending had been “inflationary”, he told Sky News.

New official figures showed the economy contracted in April by 0.3% – more than expected. It coincided with Donald Trump imposing tariffs across the world.

Ms Reeves admitted the figures were “disappointing” but pointed to more positive figures from previous months.

‘Sting in the tail’

She is hoping Labour’s plans will provide more jobs and boost growth, with major infrastructure projects “spread” across the country – from the Sizewell C nuclear plant in Suffolk, to a rail line connecting Liverpool and Manchester.

But the IFS said further contractions in the economy, and poor forecasts from the Office for Budget Responsibility, would likely require the chancellor to increase the national tax take once again.

It said her spending review already accounted for a 5% rise in council tax to help local authorities, labelling it a “sting in the tail” after she told Sky’s Beth Rigby that it wouldn’t have to go up.

Business

FTSE 100 hits record high on back of US-Iran tensions

Published

16 hours ago

June 12, 2025

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FTSE 100 hits record high on back of US-Iran tensions

The FTSE 100 has secured a new record closing high after riding out a US trade war-linked slump.

The index of London’s leading shares gained 20 points to hit 8,884, surpassing the 3 March peak of 8,771 and leaving its value more than 8.6% up in the year to date.

It was achieved despite gloomy official figures covering April – when the impact of the US trade war started to be felt, household bills spiked and budget tax and wage rises hit employers for the first time.

The Office for National Statistics reported that the economy contracted by 0.3%.

Money latest: Boeing shares suffer after India plane crash

The FTSE 100 tumbled early in the spring when Donald Trump‘s protectionist agenda gathered steam through a series of on-off tariffs against global trading partners, later exacerbated by his “liberation day” escalation.

Stock market values were hit worldwide as the consequences for domestic economies – and global activity – were digested amid a slew of output downgrades by respected international bodies such as the International Monetary Fund.

But the suspension or reductions of many trade tariffs, coupled with select deals to end hostilities with nations such as the UK, has helped values climb back since last month.

A new high for the UK’s top flight shares was almost achieved on Wednesday, as a limited trade truce between the US and China was on the table following talks in London.

But market analysts said on Thursday that the optimism was overtaken by nerves around whether the progress could be maintained and a surge, of up to 4%, in global oil prices due to growing tensions between the US and Iran.

Mr Trump has repeatedly warned the country it is at risk of airstrikes by the US and Israel if it is found not to be complying with its nuclear obligations.

A United Nations report has made such a finding – and some US personnel have been evacuated from the Middle East region as a result.

The spike in oil costs late on Wednesday, which took the Brent crude international benchmark to a two-month high, lifted the values of energy-linked shares including those of BP and Shell early on Thursday.

Precious metal miners were also doing well.

Tesco was among the winners too, gaining almost 2%, thanks to a solid set of first quarter results.

Weaker than expected US inflation figures yesterday, which kept the prospect for a summer interest rate hike by the Federal Reserve intact despite the continuing trade war, also helped prop up sentiment internationally.

The outlook for UK and global stock market values, however, is very uncertain.

FTSE 100 firms make the bulk of their earnings overseas so a deep-seated trade spat between the world’s two largest economies is particularly damaging.

The big risks to listed companies have all been related, in some way, to trade war exposure since the start of the second Trump administration.

Neil Wilson, UK investor strategist at Saxo Markets, said of the record high: “I think we have clearly seen a rotation in global equity markets as investors have for the first time in years questioned the TINATA – there is no alternative to America.

“Investors are looking elsewhere and consistently conversations with clients revolve around geographic diversification and reducing exposure to the US.

“Of course there are alternatives to the UK – we should note that while the FTSE is up over 8% YTD [year to date], the DAX has rallied almost 20%, but clearly the UK has picked more than a few crumbs.

“More than this, it’s got some attraction from a value, income and defensive perspective given the volatility we have seen and changed macro backdrop and assumptions about US exceptionalism.”

Business

India crash is fresh setback in Boeing’s bid to restore reputation

Published

16 hours ago

June 12, 2025

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India crash is fresh setback in Boeing's bid to restore reputation

As hundreds lie dead following the latest tragedy to beset a Boeing passenger plane, it is too early to determine blame.

Pilot error, engine failure and bird strikes are among the theories all being banded about. Only the recovery of Flight AI171‘s black box flight recorders are likely to provide the concrete answers.

What is inescapable though is that this is an air disaster the plane’s maker, Boeing, could well do without.

Plane crash latest: 53 Britons on board

It sounds petty, in the midst of such a catastrophe, to be talking about the impact on a company, but this has been a civil aviation giant left deeply scarred, in the public eye, through its attitude to safety in recent years.

While the 787 Dreamliner’s record had been impressive up until today, the same can not be said for the company’s 737 MAX planes.

The entire fleet was grounded globally for almost two years following the demise of Ethiopian Airlines Flight 302 outside Addis Ababa in March 2019.

All 157 people aboard were killed.

Six months earlier, a Lion Air 737 MAX, carrying 189 passengers and crew, crashed in Indonesia.

At fault was flight control software that has since been rectified.

That recent past continues to haunt Boeing.

It took those crashes to uncover a culture of cover-up. It amounted to not only a corporate failure but one of regulation and justice too, according to critics, as relatives were denied their days in court due to plea bargains.

Just last month, the US Justice Department and Boeing agreed a non-prosecution agreement over those two fatal crashes in return for $1.1bn in fines and an admission that it obstructed the investigation.

It raises several questions over the US legal system and its ability to police corporate activity and incentivise playing by the rules.

Boeing safety record under scrutiny after first fatal Dreamliner crash

Mickey Carroll

Science and Technology reporter

The crash of an Air India plane, carrying 242 people bound for Gatwick Airport from Ahmedabad, is the first fatal incident for Boeing’s 787 Dreamliner.

Experienced pilots who have studied video of the moments before the crash have told Sky News the flaps on the wings appear not to be set in the normal take-off position, however the cause of incident is unknown.

In a statement, Boeing said: “We are in contact with Air India regarding Flight 171 and stand ready to support them.

“Our thoughts are with the passengers, crew, first responders and all affected.”

Multiple concerns about Boeing’s Dreamliners, the most modern passenger aircraft in service, have previously been raised by whistleblowers.

In April 2024, a Boeing quality engineer, Sam Salehpour, told members of a Senate subcommittee that Boeing was taking shortcuts to bolster production levels that could lead to jetliners breaking apart.

The engineer said he studied Boeing’s own data and concluded “that the company is taking manufacturing shortcuts on the 787 programme that could significantly reduce the airplane’s safety and the life cycle”.

“They are putting out defective airplanes,” he said.

Boeing denied Mr Salehpour’s claims about the Dreamliner’s structural integrity.

In the same week, a separate Senate commerce committee heard from members of an expert panel that found serious flaws in Boeing’s safety culture.

One of the panel members, MIT aeronautics lecturer Javier de Luis, said workers feel pressure to push planes through the factory as fast as they can.

When talking to Boeing workers, he said he heard “there was a very real fear of payback and retribution if you held your ground”.

Speaking to a Senate subcommittee in June 2024, Boeing chief executive Dave Calhoun said: “Our culture is far from perfect, but we are taking action and making progress. We understand the gravity.”

“We are taking comprehensive action today to strengthen safety and quality.”

In May 2024, federal investigators opened a fresh investigation into the Boeing 787 Dreamliner – after the firm said several employees had committed “misconduct” by falsely claiming tests had been completed.

The Federal Aviation Authority said Boeing was “reinspecting all 787 airplanes still within the production system and must also create a plan to address the in-service fleet” while the investigation is taking place.

Would a British manufacturer have been offered such a deal by US prosecutors?

As for regulation, we’re told oversight has been stepped up and the number of planes that Boeing makes is still subject to controls in a bid to boost quality.

The company has long denied putting profit before safety, but that is what almost every whistleblower to have come forward to date has alleged.

The production limits were implemented after a mid-air door plug blowout aboard an Alaska Airlines Boeing 737 MAX 9 flight in January last year.

They are hampering Boeing’s efforts to restore profitability.

A 5% fall in its share price at the market open on Wall Street goes to the heart of Boeing’s problem.

That is every time a Boeing plane is involved in an accident or failure, investors’ first instincts are to run for the hills.

Boeing says it is seeking more information on the nature of the Air India crash.

But whether Boeing’s plane is at fault for the loss of Flight 171 or not – and we have seen nothing so far to indicate that was the case – it’s clear the company has a long way to go to restore trust.

In a statement, Boeing president and chief executive Kelly Ortberg, said: “Our deepest condolences go out to the loved ones of the passengers and crew on board Air India Flight 171, as well as everyone affected in Ahmedabad.

“I have spoken with Air India chairman N. Chandrasekaran to offer our full support, and a Boeing team stands ready to support the investigation led by India’s Aircraft Accident Investigation Bureau (AAIB).”

Boeing will defer to India’s AAIB to provide information about Air India Flight 171, in adherence with the United Nations International Civil Aviation Organization protocol, the company added.