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Industrial / Hard to Abate

Innovation Zero 2024 Main Stage

UK Modern Industrial Strategy: A Sector Decarbonisation Report

As the UK drives forward its Modern Industrial Strategy, foundational industries like steel, cement, chemicals, and other hard-to-abate sectors are crucial to decarbonise. These sectors form the backbone of national infrastructure and economic resilience, but they also account for a significant share of emissions.

This feature breaks down the key strategic themes influencing the decarbonisation of UK industry, including steel decarbonisation, cement & CCUS, and geographic strategy , supported by real-world case studies and exhibitor insights from Innovation Zero 2025.
 

VIEW REPORT     EXPLORE THEMES

Steel

Steel: A National Priority

Steel production is the backbone of Britain’s Modern Industrial Strategy—supporting critical infrastructure and enabling the clean energy transition through technologies like electric vehicles and offshore wind.

With landmark projects such as Heathrow’s third runway on the horizon, the demand for domestically-produced, low-carbon steel has never been clearer. Strategic investments—like the £500 million upgrade to Tata Steel’s Port Talbot facility—mark a decisive shift toward electric arc furnaces (EAFs), a cleaner alternative to traditional coal-based methods. But EAFs alone won’t get us to net zero.

To fully decarbonise steel, we must go further.

The UKs Modern Industrial Strategy report highlights hydrogen and CCUS as key pathways to achieve low carbon steel

Hydrogen

Hydrogen

Hydrogen can replace coal as a reducing agent in steel production, particularly in direct reduced iron (DRI) processes. When produced with renewable energy, it unlocks a pathway to near-zero emissions.

Key benefits:

  • Coal-free steelmaking: Hydrogen acts as a reducing agent to strip oxygen from iron ore.

  • Deep decarbonisation: When produced via electrolysis powered by renewables, it’s virtually emissions-free.

  • Cross-sector impact: Also supports decarbonisation in transport, ammonia production, and chemicals.

CCUS

CCUS

CCUS captures emissions from existing assets—especially blast furnaces—buying time for transition while preserving industrial capacity and jobs.

Key benefits:

  • Retrofits existing assets: Minimises disruption to operations and jobs.

  • Captures hard-to-abate emissions: Particularly effective in legacy facilities.

  • Scalable across regions: Links industrial clusters to shared pipelines and storage sites.

Cement & CCUS: The Essential Connection

Cement accounts for around 7% of global CO₂ emissions, much of which comes from chemical processes that cannot be decarbonised through electrification alone. The UK’s Industrial Strategy places CCUS at the centre of cement decarbonisation.

Leading the Way: UK Projects in Focus

  • Padeswood, North Wales: Heidelberg Materials is building a full-scale carbon capture plant, aiming to capture up to 800,000 tonnes of CO₂ annually.

  • HyNet Industrial Cluster: This growing North West England hub provides shared CO₂ transport and storage infrastructure, positioning the UK as a global leader in cement CCUS deployment.

Leaders in Hard to Abate

Natasha Boulding - CEO of Low Carbon Materials

The CEO of Low Carbon Materials shares how their innovative concrete formulation reduces embodied carbon by replacing cement with industrial by-products. Their solution supports low-carbon construction at scale and aligns with the strategy’s emphasis on circular, high-performance materials.
 

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Irina Gorbounova - Arcelor Mittal

“Steel and cement are hard to abate — but even harder to ignore.”

Speaking at “Accelerating Innovations: From Seed to IPO”, Irina Gorbounova urged greater focus on the industrial foundations of the net zero transition—not just the headline-grabbing tech.

 

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Place-Based Strategies and Industrial Clusters

The UK Government’s Industrial Strategy is powering regional growth through targeted Freeports, Investment Zones, and Innovation Zones — designed to anchor clean industry, connect talent, and scale innovation.

📍 Clustered for Impact:

  • Clean energy hubs: Celtic Freeport, Cromarty Firth, Teesside Freeport, and HyNet-linked regions are advancing hydrogen and CCUS solutions.

  • Advanced manufacturing centres: From the West Midlands Investment Zone to South Yorkshire and Greater Manchester, these zones are modernising core industries.

  • Innovation corridors: The Oxford–Cambridge Growth Corridor, Liverpool City Region Innovation Zone, and West Yorkshire (HealthTech) are fostering cross-sector collaboration.

Cluster Map

These regions are critical not just because of what they produce—but because of how they connect. By strengthening the ties between clusters, city regions, and devolved nations, the strategy ensures that innovation, investment, and opportunity flow across boundaries. 

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