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Industrial clusters: Unlocking net zero potential in the Western Gateway

What opportunities are brought by industrial clusters in powering the South West of England and Wales’ transition to net zero? And how can we overcome the barriers faced? These were the two big questions we discussed at a roundtable we hosted earlier this Autumn. We’ve identified six top barriers and possible solutions.

We hosted the roundtable with key stakeholders at the Western Gateway Convention, following the launch of its ‘Plan for Sustainable Growth’. With attendees including leads from the South Wales Industrial Cluster, Net Zero Industry Wales and the West of England Industrial Cluster, decarbonisation and renewable energy developers, co-consultants, industrial, port, local and national government representatives, our discussion focused on the opportunities industrial clusters bring, together with workshopping solutions to barriers they’re facing.

The opportunity

Heavy industry is reliant on fossil fuels and is a primary target for decarbonisation to support national climate commitments, as reinforced by the UK Government Invest 2035: the UK’s Modern Industrial Strategy consultation and Strategic Plan for Long-Term Energy Infrastructure.

The industrial clusters, which represent hubs of intensive energy users, have secured UK Government funding as part of the Industrial Clusters Mission to create cluster plans and support a transition to low carbon industry. The South Wales Industrial Cluster and West of England Industrial Cluster are active within the Western Gateway region and bring significant opportunities in terms of collaboration, attracting inward investment and growth.  

We have seen the scale of the opportunity through our work delivering projects with the clusters in recent years. Work has already been done to join the dots on decarbonising and collaborating on energy production, use and technology.  

But we have also witnessed firsthand the barriers impacting the delivery of Net Zero Infrastructure projects. Our roundtable discussion was action-focused in identifying solutions to these barriers.  

What are the top six barriers and how do we tackle them?

What is the barrier?  

Despite a strong pipeline of prospective projects at a cluster level, uncertainties in funding and investment for specific technologies lead to delays through consenting, development and delivery. This has knock on effects for aligned projects (such as front-end, offtake or end-user projects). Similarly, committed UK Government funding for the industrial clusters will soon come to an end, leaving uncertainty in long term leadership and governance. Funding for Pan-Regional Partnerships, including the Western Gateway, could also come to an end following the Autumn Budget and current UK Government consultation.  

What is the solution?  

• The region must adopt a proactive approach to decarbonisation initiatives rather than waiting to respond to challenges as they arise. This shift requires robust planning, early funding and a culture of innovation to anticipate future obstacles and address them in advance.  
• Clearer, accessible funding pathways (led by UK Government and Welsh Government), with clarity in timescales, are needed to support delivery of Net Zero Infrastructure at pace. This must recognise the link between different technologies such as Sustainable Aviation Fuel (SAF), Carbon Capture Utilisation and Storage (CCUS) and hydrogen to ensure uncertainty does not stall delivery.  
• Long term clarity on funding to support evolution and leadership of industrial cluster plans. The collaboration, investment and strategic direction already established should be capitalised on and these play an important role in joining regional dots alongside the NESO ambitions, Autumn Budget and Industrial Strategy intentions to identify ‘CCUS clusters’ and ‘high potential clusters’.

What is the barrier?  

Navigating the intricate network of government agencies, private partnerships, devolved responsibilities, and public-sector bodies is challenging. When combined with complex and inconsistent planning and consenting processes, alongside a lack of clarity from UK and Welsh governments (such as regulations around CO2 transport and hydrogen), this produces obstacles to regional and project-specific progress. The Western Gateway region spans English and Welsh planning regimes, political structures and policy context which adds a layer of complexity for project delivery across jurisdictions. If executed properly, this could present a unique opportunity. However, the CCUS consultation launched by Welsh Government this month demonstrates the extent of policy gap and support for key technologies between Governments. There remains a long way to go to align policy priorities, collectively agree what a realistic and deliverable ‘just transition’ looks like, overcome uncertainty and speed up project delivery.

What is the solution?  

• Clusters can play a pivotal role in serving as hubs to unify the right stakeholders, organisations and individuals to achieve a shared goal and cross-sector and cross-border collaboration. It is essential that we align policy with the local and regional need case and market drivers. This must also be informed by the experts and businesses underpinning it to ensure it is relevant and supports delivery.  
• Clearer strategic direction will provide essential guidance and clarity for businesses and clusters working on decarbonisation plans, initiatives and development. Strategic and regional plans that work hand in hand with policy will drive project success.  
• From a planning and consenting perspective, we need to streamline processes to adopt a clear, standardised framework for emerging technologies that can facilitate certainty in rapid project approval and instil confidence for developers. Clear policy direction and regional plans can underpin this – where decision makers have certainty, it is much easier to standardise assessment expectations and outcomes.  

What is the barrier?  

Repeat and closed discussions between clusters, landowners, developers and regulatory bodies lead to inefficiencies. Net zero investment, technologies, and delivery can come with commercial sensitivities and confidentiality. As a result, conversations with cluster leads, local planning authority officers, consultees and stakeholders can result in missed opportunities for collaboration and repetition, resulting in a lack of understanding and resistance.

The current uncertainty of investment and funding streams is also creating conditions for competition rather than collaboration in geographies and energy sectors, further fuelling these challenges.  

What is the solution?  

• Collaboration and openness to shared knowledge and insights, balancing local expertise with national policy and strategic direction, to create centres for excellence in the region. Industrial cluster partnerships have created a market and knowledge-driven basis for sharing intelligence between local partners, investors, developers and stakeholders.  
• Combining this with a willingness to share project information, in the right context and with the right people, will allow for mutual understanding of complexities to streamline delivery. For instance, publicising funding timescales and constraints on a programme which all parties can sign up to and use to inform their decision making process.  
• Alignment on standardised approaches for key issues across clusters (regionally and nationally) to streamline processes and create consistency. For instance, uniform guidelines from agencies like Natural Resources Wales (NRW) and the Environment Agency (EA) on technical assessment standards would bring greater clarity for local planning authorities and provide developers with standard expectations.  

What is the barrier?  

There is a resource constraint at local authority, consultee and Government level slowing engagement, planning decisions and ultimately the delivery of Net Zero Infrastructure. There is also a gap in skills which will be essential to developing and operating technical processes into the future. Managing this will be critical to sustaining the decarbonisation, inward investment and growth trajectory of the Western Gateway.

What is the solution?

• Investing in decision making. Closing resource gaps in local authorities and other statutory bodies will speed up decision-making processes. This includes investment in both numbers on the ground (to make the decisions at pace) and consistent investment in the right skill sets for Net Zero Infrastructure projects across these bodies (to make informed decisions, quicker, against standardised evidence). This, coupled with clear targets to improve determination timescales, is critical. Promising announcements have been made by the Welsh Government to accelerate planning decisions for infrastructure projects of national significance by delegating decision making powers to Planning and Environment Decisions Wales (PEDW) on projects up to 50MW.  
• This should be top-down Government-led but can be coupled with bottom-up and partnership investment in tackling resource constraints. Net Zero Industry Wales (NZIW) recent agreement with Natural Resources Wales (NRW) is making strides to combat this, working with its partners and collaborators, but cannot achieve this alone. Announcements last week^[1][2] also demonstrate a commitment of greater funding to delivery partners like NRW, to boost immediate resource and decision-making.  
• Regionally and nationally, we need to focus on building a future-ready workforce by prioritising education and training to ensure young people are equipped to deliver Net-Zero Infrastructure. Priority must be given to upskilling and retaining existing industrial skill sets to meet the needs of future low carbon industrial processes. Co-location of industry and education can help facilitate hubs and clusters of innovative skills, learning and experience.  

What is the barrier?  

We continue to see challenges regarding local sentiment and acceptance for development within the sector. There is general public acceptance that there is a climate crisis but there are varying levels of knowledge and understanding of what the solutions to this look like (infrastructure development, emerging and innovative technologies, transfer in skills and evolution in job opportunities). This can result in misconceptions and resistance to Net Zero Infrastructure through planning and delivery.  

We can begin to overcome this through the delivery of development that will start to see visions come to life; social value commitments become more than words, as a reality enacting local change. We must start to work together to share best practice and real-world examples of regional success to demonstrate the genuine local opportunities associated with Net Zero Infrastructure.  

What is the solution?  

• Net zero cannot be achieved by any one project or technology. A collaborative approach is essential to tell the story – bringing stakeholders and communities in to understand industrial decarbonisation, why this is essential, what this could look like and what opportunities this presents in terms of regional investment, job opportunities (both new and transferrable skills) and social and environmental benefits. This is a shared responsibility for UK Government, Welsh Government, clusters, developers and local political / community representatives to lead a collective narrative that fosters understanding and support for change.
• There are opportunities to approach and co-ordinate social legacy at a cluster level to ensure meaningful commitments that work to make the ‘net zero conversation’ relatable to those who aren’t in the industry. This could mean collaboration with schools, colleges and universities on  curriculum and course opportunities that directly correlate to training / retraining for the diverse skills required to support the delivery and operations of new and emerging technologies. This is accompanied by supporting services where there are resource challenges, including planning and consenting.  

What is the barrier?  

There are challenges regarding the availability of land for development in some areas, remediation and viability. This includes sensitivities that are associated with available land within ports, industrial areas and brownfield sites, such as ecological considerations, contaminated land and waterways.  

Once land is identified, further challenges are faced regarding existing and potential energy needs and off-takers (including access to grid capacity, water, hydrogen etc.). Industrial decarbonisation projects are often interlinked, and these interdependencies make the need for collaboration, consistency and clarity in timescales for delivery increasingly important.  

What is the solution?  

• A holistic view of emitters, energy users and potential development solutions is more powerful than individual views from individual assets / developers to UK and Welsh Government to inform relevant policy direction and funding pathways.
• Industrial clusters and cluster plans provide the opportunity to strategically map available land. They can create a spatial plan of wants and needs of existing assets, in addition to investment opportunities, to inform meaningful collaboration and responsive policy direction, together with an interconnected grid system.  
• Government should recognise the hard work already underway, informed by business and the market. This, combined with strategic direction from new bodies such as NESO is our most powerful tool to deliver opportunities promptly, in the right places.  

Summary

There is positivity across the region, and nationally, with momentum driven by the Industrial Clusters to support project planning and delivery. We have seen significant strides made in announcements from UK and Welsh Government within the sector this year – with a change in leadership and political alignment for the first time in 14 years. There are signs that indicate a willingness to think about things differently and be bolder to support streamlined delivery of Net Zero Infrastructure at a national level. We now need to see delivery on that political ambition.

It is important that the hard work already being undertaken at cluster level is effectively embedded into new strategic objectives led by UK and Welsh Government. Strategic, national direction is essential (including NESO ambitions); however, regional and cluster leadership remains key to ensuring this ambition is driven locally, whilst evolving national policy and funding plans remain regionally relevant to industry to support effective delivery against targets. Taking a holistic approach, to effectively map the vision and needs of all cluster users and local communities, will highlight collective social, environmental and economic benefits and provide a coherent approach to facilitate both Government support and public acceptance going forward.

For more information on our work with industrial clusters or our experience in delivering net zero infrastructure please get in touch with a member of the team or download our brochure.

18 December 2024

[1] Clean Power 2030 Action Plan
[2] National Planning Policy Framework