The Tees Valley is located in the North East of England and represents one of the UK’s largest and most concentrated industrial areas. Facilities in Teesside emit 5.6% of industrial emissions in the UK and due to growing requirements from customers, policy and regulation aiming to reduce carbon emissions, industrial players have joined at the heart if the Tees Valley project is the concept of developing strategic CCS infrastructure that serves a variety of industrial CO2 sources, both from the industrial and potentially also the power sector. Such volumes can be collected by a single transportation pipeline and a directed to a safe storage area in the North Sea. To achieve this goal, companies are aiming to create Europe’s first CCS equipped industrial zone. Thanks to an investment of 1.3 million Euros from the UK government, the Teesside Collective has undertaken a study to develop an engineering plan and business case for an industrial CCS network. The results of this work will be unveiled in July 2015 and the consortium intend to move into project development in 2016.

1. The Importance of Industrial CCS to Europe
17th June 2015, Brussels
Mark Lewis
Tees Valley Unlimited
Low Carbon Manager
@Teescollective
www.teessidecollective.co.uk
info@teescollective.co.uk

2. Why ICCS and Why Teesside?

4. Over £3bn Investment over last
5 years
Company Capex
SSI £1.9 billion (€ 2.4 billion)
Air Products £600 million (€ 780 million)
Sembcorp and SITA £200 million (€ 260 million)
SNF Oil & Gas £150 million (€ 195 million)
BOC Linde £100 million (€ 130 million)
Huntsman Tioxide £65 million (€ 84.5 million)
Lotte Chemicals £60 million (€ 78 million)

5. Highly Productive Industry
• High employer
• High GVA - £10bn (€ 13bn)
• Average GVA per person is £49,000 (€ 63,700)
• Average in chemical sector is £89,000 (€ 115,700)
• Average in chemical sector in Teesside is £104,000 (€ 135,200)
• High wages
• Average UK wage is £27,000 (€ 35,100)
• Average UK chemical wage is £30,500 (€ 39,650)
• Average Teesside chemical wage is £35,600 (€ 45,500)
• Consistent trade surplus - £4bn exports (€ 5.2bn)

6. Why we need ICCS
• EU Industry facing growing requirements from customers, policy & legislation to
reduce carbon emissions
• The only technology available to significantly reduce industrial carbon emissions
• Can’t meet carbon targets without Industrial CCS
• Technologically proven at a commercial scale on industrial plants
• Building a strategic asset for EU – enables investment in low carbon production

7. Why Teesside is a good place
to start
• >10million tonnes available CO2 in a very compact location
• Easy and cheap wins to capture CO2
• Easy access to North Sea storage sites
• Multinational companies are engaged in developing the network in Teesside
• We have already undertaken much of the pre-FEED work
• We can be operational by 2025 capturing 5million tonnes from the start
• BUT – how to fund it which doesn’t lead to Carbon Leakage

8. What would we achieve?
• Future-proof important industries from rising costs of CO2
• Create an opportunity for new & inward investment in low carbon production
• Sustain & Generate jobs
• Be a template for other industrial regions across the EU
• Cost effectively reduce CO2 emissions by 5million tonnes a year by early 2020s
• Play a crucial part in meeting 2050 80% emission reduction targets
• Enable industry to meet increasing demands for sustainable products

9. Who are Teesside Collective?
Multinational companies based in Teesside aiming to
create Europe’s first CCS equipped industrial zone
BOC Largest steam methane reformer in UK
Growhow Largest UK ammonia fertiliser
producer
SSI Europe’s second largest blast furnace
Lotte Produces PET for15bn drinks bottles
per year
National Grid Store developer
TVU Local Government
NEPIC Cluster representative
“CCS on industrial plants is going to be a
critical part of the global effort to prevent
serious climate change. Teesside is in the right
place, at the right time, to get ahead of the
curve.”
Sir David King, UK’s Special Representative
for Climate Change
“A CCS network in Teesside is a critical step,
giving a shot in the arm to British industry’s
long-term future.”
Dianne Sharp, North East Director, CBI

10. What has Teesside Collective
done?
• Received £1million (€ 1.3million) from Central Government to:
– Engineer and cost a solution to capture CO2 from 4 industrial plants, onshore transport network, offshore
transport network, and identify a store
– Develop the Business Case for an industrial CCS network
– Propose a solution to ‘how can Industrial CCS be funded?’
• We have:
– Commissioned Experts (Pale Blue Dot, Amec Foster Wheeler, Societie Generale, and Cambridge
Econometrics)
– Completed the Engineering
– Developed the Business Case
– Developed the funding models
– Produced an economic impact assessment
• Project will be launched in July 2015 – as much information as possible will be public

11. Conclusions
A Teesside Industrial Network is
– Technically feasible
– Relatively low cost
– Possible to see how to fund
BUT
• Without a funding mechanism Industrial CCS will not happen
• Costs cannot be passed on to consumers and EU ETS certificates are not bankable
• Industrial companies can close – long term financing unavailable
• Clustering important to minimise individual credit risk and decrease infrastructure costs
• Can we separate Transportation and Storage to reduce risk – Regulated Asset Base, Capital Grant, NER400
• NER400 could provide opportunity, especially for Transport and Storage for clusters
• Need to secure FEED/FID funding for project – NER300+ opportunity

12. Thank you