Budget 2026: Chancellor urged to back Humber reindustrialisation as industry confidence wavers
Businesses in the Humber are hoping for good news on carbon capture and storage project and the UK’s first hydrogen network in the Budget.
Businesses are urging John Healey to back major reindustrialisation projects in the Humber, otherwise there are fears that jobs and investment will start moving overseas.
Sector leaders are hoping for good news in this month’s Budget regarding the carbon capture and storage project in the region, as well as its bid to become the UK’s first hydrogen network.
Rachel Reeves previously committed to supporting the Viking CCS plan, while the Department for Energy Security and Net Zero is set to allocate £500m to the hydrogen network.
The CCS would see carbon dioxide emissions taken from Immingham 34 miles to Theddlethorpe in the Lincolnshire coast, where they would be transported into huge tanks beneath the North Sea.
The vast majority of investment has been put forward by private businesses, such as Harbour Energy which is leading the CCS project, however they also require Government support.
This would help fill up the carbon stores and take Viking on to a final investment decision this Parliament.
Businesses say they have £15bn ready to invest in the Humber if the Government provides adequate support to get CCS off the ground.
However, there are fears the commitment could waiver given the serious fiscal constraints the Chancellor is working with.
Olivia Powis, CEO of the Carbon Capture and Storage Association, told The Yorkshire Post: “Anything that pulls back on existing commitments is damaging, not only for those projects but also confidence for the industry.
“We need to keep the momentum going, there isn’t really slack in the system to delay. We need progress to secure final investment decisions this Parliament.
“For the industries involved, both for the emitters and infrastructure - it’s really critical that they have got some certainty in how they can move forward.
“You don’t get reindustrialisation if you pull back. Reindustrialisation for us is not just a slogan, this is deliverable.
“This is very real for all these regions, in terms of creating jobs, growth, attracting inward investment, protecting industries and creating apprenticeships.
“These industries can only continue if there are going to be the next projects to invest in.”
The region is the UK’s most carbon intensive industrial area and energy firms say the investment is essential to support the Government’s bid for clean energy by 2030 and net zero by 2050.
The Yorkshire Post quizzed Reindustrialisation Minister Blair McDougall on DESNZ’s commitment to the Humber.
He said: “Both hydrogen and carbon capture undersea storage are an essential part, not just of the reindustrialisation story, but of the net zero story as well.
“The Climate Change Committee recently said it’s not an optional extra but essential if we are going to rise to those challenges.
“Decisions on all of these projects will be a matter for the Budget, but we are absolutely committed to the role that hydrogen can play in the UK economy.”