With a growing reliance on hydrogen and carbon capture and storage as options to accelerate the pursuit of net zero and revitalize industrial hubs, energy companies and industry stakeholders are fundamentally rethinking how they engage and build community acceptance. Ensuring industrial hub decarbonization addresses local community needs will play a key part in the just transition to a low carbon economy, requiring a new level of multi-stakeholder collaboration to be successful.   

The new industrial revolution: hub decarbonization 

An energy revolution is under way within heavy industry, driven by pressure to rapidly decarbonize in the near to mid-term. As new lower emissions technologies, such as carbon capture, utilization and storage or hydrogen fuel, are most feasible at scale, industrial hubs (or clusters) are ideal locations in which to deploy them. However, new technologies, the scale and speed of development required and the physical proximity of multiple new proposed developments in one location collectively present new challenges—not just at the design and technological level, but also in terms of community buy-in.

As the low-carbon energy transition gathers pace, and industrial hubs start to realize their potential in meeting ever looming net zero targets, multiple developments may be required concurrently or within very short timeframes. Local communities may face back-to-back public consultations as each development is progressed, compounding their concerns about what is being proposed, and the scale of impacts they may face. The inability to point to precedence as a reassurance to communities, negative perceptions shaped by high-profile incidents (such as oil spills or methane leaks), and the reality that the benefits of ‘net zero’ may not always be immediately tangible for some communities only adds to the challenge. 

Simply pursuing ‘more of the same’ community engagement is, however, not the answer and is more likely to increase local apathy. Physical footfall at traditional community engagement exhibitions is dwindling and even the switch to virtual engagement has not re-ignited community interest to the extent that will be needed to accelerate industrial hub development. To continue with the status quo will risk community apathy turning to opposition.

At many hub sites, communities themselves have identified the solution: a more joined-up approach in how information sharing, health, safety and social impact assessments and management and social investment in support of proposed developments are planned and delivered. To achieve this, all those involved in the development, planning and delivery of industrial hub decarbonization projects need to collaborate earlier, more effectively and more comprehensively.

Collaborative planning on engagement and social investment

When it comes to outward facing engagement with communities or planning around a collective approach to adverse impact management and social investment, however, collaboration typically comes to a halt or is, at best, significantly streamlined. Although the level of corporate social investment programs around this new wave of industrial hub development has never been greater, these programs are typically being developed by companies in isolation. In the context of an industrial hub, the lack of integration of social investment planning between parties can undermine the success of the collective goal, the credibility of the proposition to the public and the impact which can be generated, both in terms of social value and community acceptance.  

A just transition approach as well as multi-stakeholder collaboration is needed from the outset. Why? To agree on the planning and execution of hub-level community engagement with regards to assessing and mitigating impacts; education on the safety of new technologies; the social investment strategy to maximize community participation in the new economy; and the role and contribution that each developer within the hub should make, both financially and in-kind.

The success of hub decarbonization requires multiple developments to succeed together. Coordination on engagement and planning, in consultation with communities, alongside cohesive linked social investment within the hub can be used to enhance the consenting prospects for all proposed developments, as well as improving outcomes for the local community. Beneficial outcomes for all stakeholders include:

  • Communities will be more prepared to meaningfully engage and support hub development
  • Projects will benefit from local input to inform safety and environmental plans
  • Developers are more likely to see projects obtaining the necessary approvals from governments and regulators, both individually and collectively
  • Regional economies will attract new low-carbon industry and investment to expand industrial hubs and local employment
  • Local energy-intensive businesses will gain access to clean infrastructure and technology to reduce their carbon emissions

Putting communities first 

While top-down community impact management and social investment approaches solely led from central or federal governments run the risk of failing to identify or address local needs, individual developer-led initiatives often start from the premise of what the company has identified as important from a global social performance perspective, rather than the local context. Both approaches have varying degrees of success and are subject to criticism that neither places community needs at the heart of the social engagement and investment planning process.  

The alternative approach, as evidenced in some geographies, is collaboration driven by the local government or industrial hub delivery body, engaging upwards to higher levels of government, horizontally across regulatory bodies and downwards across the multiple industry developers. A stakeholder whose central objective is the success of the hub and who understands the needs of the local communities, is a credible facilitator for collaborative engagement and social investment planning.

An example of this in action is The Single Conversation Group in The Humber, England, with whom ERM has engaged as part of our role supporting clients to develop projects in the region. The Group brings together local government, regulators and industry in an innovative approach to supporting development in the area. Helping to guide developers and support a more cohesive approach to both community engagement and social investment, it will be instrumental to overseeing impactful planning and investment by companies and government. In helping to meet community expectations of what transformation should bring to local people, it will accelerate the realization of the hub itself.

This model has also been replicated across two industrial areas, the Illawarra and Hunter Regions in New South Wales, Australia. ERM’s stakeholder engagement activities have focused on bringing together key industrial players, government representatives, not for profits, local research organizations and emerging technology companies. Collaboration has led to significant insights and recommendations for a regionally based industrial decarbonization plan, which addresses policy reform, market drivers, regulatory gaps, enabling infrastructure, technological development, coordination and investment requirements.

The challenge for stakeholders vested in the success of decarbonized industrial hubs is to facilitate more systematic and comprehensive collaboration, from the outset of hub decarbonization and across all geographies. The benefits of a just transition for all stakeholders are clear. The selective examples of meaningful collaboration now need to become the new industry norm.