Re-imagining manufacturing in the green economy

INDUSTRY

Inform.

Manufacturing as a sector is more important to Wales than to any other single part of the UK.

Its sub-sectors, including automotive, aviation, chemical, construction, engineering, agriculture and food, steel, technology and transport, are the lifeblood of the Welsh economy.

How these industries produce their commodities is undergoing profound change - a transformation being driven by the impact of the COVID-19 pandemic, the EU transition, and fundamentally, by meeting the demands of decarbonisation.

As demand for high-carbon goods and services is constrained, businesses will need to react to the new market: consumers (individuals and businesses) increasingly demanding low carbon products and components in order to meet their own carbon ambitions. And how Wales’ manufacturers respond to the behavioural change of buyers and meet the needs of motivated green consumers will be increasingly important for commercial success.

Vital for manufacturing will be to embrace the circular economy - an economy that keeps products and materials in productive use for as long as possible. Government is playing its part. The Welsh Government’s Manufacturing Action Plan aims to help “future proof” manufacturing by encouraging a diverse base of outward-looking firms, “with positive innovation performance, good productivity levels and a workforce equipped with the skills for a changing world.”

After decades of reliance on the ephemeral, instantly replaceable, a focus on designing for longevity and repair is needed. This revolution in consumer behaviour may be the most dramatic effect of society’s reaction to the climate emergency. The COVID-19 pandemic has had a significant impact on the value of exports from Wales, but the Welsh Government is keen to support Wales’ exporters in re-establishing and expanding their supply chains and markets.

Green Industries Wales INDUSTRY

Inform.

The change of culture required in manufacturing is immense, but manufacturers are already on board. Research by MAKE UK (The Manufacturers Association) suggests that awareness of the 2050 net-zero target is high, with 90% of manufacturers across the UK aware of it. But less than half see it as an opportunity.

Despite this, the research shows manufacturers are investing in energy efficiency measures and seeing benefits from doing so. 30% have made energy efficiency investments in the last 12 months, mostly in relation to buildings, equipment and manufacturing processes. 40% report increased profit margins and 30% report increased competitiveness as a result.

Manufactturing clusters, working towards shared goals, are vital in the new ecosystem required to deliver net zero. And the pioneering consortiums have already begun the journey,

In North Wales, the HyNet programme is one of just two carbon capture, usage and storage schemes to be selected by the UK Government for fast track development.

HyNet will produce hydrogen to replace fuels in transport, industry and homes while also capturing and storing carbon dioxide produced by energy-intensive industries.

The HyNet consortium - which includes Hanson Cement, the single largest industrial emitter in North Wales - is set to decarbonise Hanson’s Padeswood Works operations near Mold, and transform industry across Wrexham and Flintshire through switching to clean hydrogen. Other partners already onboard the HyNet programme are Kellogs at Wrexham and Essity at Oakenholt in Flintshire. The HyNet project could begin to see decarbonising north east Wales from as early as 2025, reducing annual CO₂ emissions by 10m tonnes by 2030.

The South Wales industrial Cluster (SWIC) in the South is a collaboration between south Wales industry, energy suppliers, infrastructure providers, academia, legal sector, service providers and public sector organisations, stretching from Pembrokeshire in the west to Monmouthshire in the east, which collectively employs more than 100,000 people.

These companies and organisations have joined forces to support South Wales in becoming a net zero region by 2050. South Wales is the second largest industrial emitter in the UK, releasing the equivalent of 16 million tonnes of carbon dioxide per year across industry and energy generation.

Each industry faces its own options to decarbonise, but they are dependent on infrastructure being established and available.

SWIC’s ambitions include developing its five steps to decarbonisation, including energy and resource efficiency, fuel switching, smart networks (symbiosis), Carbon Capture Utilisation (CCU), and Carbon Capture Storage (CCS).

Infrastructure and low carbon energy supplies are essential for those five steps to take place. Collaboration is therefore imperative.The developing SWIC network has been awarded funding of over £40m (approximately 50% from UK Government and 50% from industry) for projects, namely its Cluster Plan and Deployment Plan, to plot, scope and establish in detail what is needed in South Wales to achieve industrial decarbonisation by 2050.

Ports have always been potent manufacturing sites in Wales, offering transport connections alongside proximity to markets and labour. As Associated British Ports have pointed out in their vision for Barry, Cardiff, Newport, Port Talbot and Swansea, announced in October 2021, these advantages will be amplified further as carbon pricing is implemented. ABP’s bold mission to transform their ports to meet the needs of Wales’ decarbonised economy offers Wales traditional manufacturing base, and a new generation of manufacturers, many opportunities, not least in Port Talbot and in relation to the Tata steelworks.

The Port of Milford Haven, with its Pembroke Dock Marine – Wales' Clean Energy Centre, has a vision that will play a vital national role in driving new green growth in hydrogen, floating offshore wind (FLOW) and marine energy generation, offering significant regeneration benefits, and levelling up this coastal region through the creation of fresh high-quality employment and careers for future generations. The successful delivery of this vision will be just as important for the UK, particularly for UK energy security as fossil fuels are phased out, as it will be for Pembrokeshire and Wales.

The things we make, and how we make them is changing. The way we transport them is changing. The way we conceive them is changing. The challenges and opportunities for manufacturing in Wales are many on the journey to decarbonisation. It will need imagination and bold ambition to succeed; it will need the ability to think outside the box, and pursue new collaborations to ensure sustainability, increased market share and profitability.