By Megan Darby in Middlesbrough

“This remarkable place, the youngest child of England’s enterprise, is an infant, but if an infant, an infant Hercules.”

These words of prime minister William Gladstone, visiting Middlesbrough on the river Tees in 1862, have passed into local legend. With iron ore from the Eston hills and steel foundries, the burgeoning town did more than its share of heavy lifting in Britain’s industrial revolution.

It came at an environmental cost. Not for nothing are Teessiders known as “smoggies”. But for more than a century, people and money flowed in.

From such youthful vigour, Hercules has got a little doddery. Last October, the last blast furnace on Teesside fired down, unable to compete with cheap Chinese imports. The unemployment rate, swelled by 2,200 redundant steel workers, is among the worst in the country.

The remaining heavy industry, which includes some of Europe’s highest emitting plants, is under pressure. In the short term, the main issue is surplus production in Asia. In the longer term, its levels of pollution clash with climate goals.

Cleaning up industry looks more essential than ever, after 195 countries agreed in Paris to curb the greenhouse gas emissions behind global warming. The pact also calls for a “just transition of the workforce” – that is, helping communities adjust to the low carbon shift.

It is in tackling that challenge that a band of business leaders see a chance to reverse Teesside’s fortunes. They hope to position the region as a low carbon hub, by pumping its CO2 output into capacious reservoirs under the North Sea.

If it works in the UK, it can be a model for rapidly industrialising societies across the world.

But there are headwinds. The green revival hinges on carbon capture and storage (CCS), a technology that has seen many false dawns. Beloved of engineers and climate modellers, it needs high upfront investment for distant rewards – a tough sell politically.

Can the Teesside Collective break the mould?

Jay Brooks, a regional manager with industrial gases firm BOC, picks me up from the train station in his Jaguar – a British make of car.

He is taking me to the company’s hydrogen plant, the biggest of its kind in the country. It’s not green right now, but with investment, it could be.

We cross the river by the tourist route: Tees Transporter Bridge, a landmark featured in the film Billy Elliot and TV series Auf Wiedersehen, Pet. For £1.30, a gondola ferries cars from one side to the other, suspended from a frame high enough to allow tall ships to pass.

Its blue paint shines in the bright February morning. Brooks proprietorially points out an oxygen pipeline across the structure belonging to his firm. The message: we can do the same for CO2, no problem.

On the other side, a tangle of imposing smokestacks soon hoves into view. By the side of the road, an unremarkable-looking patch of land has a hide for bird-watchers. Migrating flocks are apparently prepared to dodge the chimneys and pause there on their journeys – testament to an environmental clean-up in recent decades.

North Tees industrial park is surrounded with barbed wire and floodlights, security Brooks explains is to protect stores of not-yet-taxed oil.

Its proximity to the North Sea is one of Teesside’s selling points. Natural gas is piped in direct from offshore rigs to industrial buyers. It is the feedstock for BOC’s hydrogen plant, reacting with steam to produce 4 tonnes of hydrogen an hour.

In the office at the base of the installation, plant manager Victoria Oleksik gets away with wearing shiny tan high heels. She takes me through a brightly coloured flowchart on the computer screen.

To take a tour, you need to don full protective gear, from boots to ear plugs. Climbing the diamond-tread steel stairs, heat coming off the reactor gives some comfort from the biting wind. Brooks opens a hatch to reveal the roaring blaze within.

At the moment, most of the hydrogen goes to a chemical works. Carbon dioxide is a by-product, going straight up the chimney. It traps heat in the atmosphere, contributing to climate change.

The Teesside Collective wants to capture that CO2 and return it to abandoned oil and gas wells.

Brooks says: “We could show you every single element that is required to make this CCS system work, up to the beachhead. All the building blocks to make it happen are existing technology. To an operator like me it is easy.”

Meanwhile, hydrogen production could be scaled up as a clean fuel for tough-to-decarbonise sectors like transport and heating. As a fuel for buses, it gives off nothing more noxious than water vapour in urban areas. Injected into regional gas networks, it reduces the carbon emissions of household boilers.

Mark Lewis’s accent betrays him as a southerner, but he used to visit his grandparents on Teesside. He has seen a lot of changes since the mid-1970s.

Now, he is ensconced in the northeast. His tie pin proclaims him as president of the Cleveland Institution of Engineers, a regional professional body. As project manager for the Teesside Collective, it’s his job to mobilise industry participation and pitch for public support.

The main driver is climate policy: the UK has a legally binding target to cut emissions 80% from 1990 levels by 2050.

“We are not going to meet our 2050 targets in the UK if we don’t decarbonise industry,” says Lewis. “We want to be doing it early in order to seek advantage from that if we can. You can’t meet those targets without CCS and particularly industrial CCS.”

There is another way of cutting those UK emissions, of course: closing heavy industry and importing carbon-intensive products. That is part of the trend over recent decades. Thai owner SSI’s closure of the Redcar steelworks last year is one example.

But on a global scale, there is no net benefit to the climate – the pollution source moves rather than disappearing. Meanwhile the region loses out on investment.

So Lewis is equally keen to stress the value to UK plc of keeping Teesside’s industry cluster alive. Employment, for one: around 4,000 well-paid direct jobs and more in the supply chain. The trade surplus, for another: £4 billion a year worth of exports.

He is not overly sentimental about what has already gone. “The loss of the blast furnace is nostalgic, it’s sad, but we have got to look forward. Low carbon industry is something I think we can do in this region.”

“We are not going to meet our 2050 targets in the UK if we don’t decarbonise industry”

Pursuing a CCS project in the UK is a triumph of optimism over experience.

Despite enjoying cross-party support, a public initiative to develop commercial scale CCS has been scrapped not once but twice.

A Labour government first launched the £1 billion competition in 2007. Four years later a Conservative and Liberal Democrat coalition cancelled it on value-for-money grounds. They had not been able to agree terms with the frontrunner – Longannet in Scotland.

The National Audit Office blamed “insufficient planning and recognition of the commercial risks”. In future, the watchdog said, the Treasury “should be clear on the public investment available and establish any affordability constraint”.

On a second attempt to find a home for the £1bn, two schemes were shortlisted – White Rose in Yorkshire and Peterhead in Scotland. Yet again, in November 2015, a now Conservative government dashed the industry’s hopes – on value-for-money grounds.

Similarly at EU level, Brussels has repeatedly tried to back CCS, only for projects to fall through.

The fundamental drivers have not changed. The UK still has an emissions target to meet. Experts warn it will be more expensive – if not impossible – to meet it without CCS.

Indeed, the Conservatives are enthusiastic about developing shale gas reserves. Gas can act as a “transition fuel” from dirtier coal to clean energy sources, they argue. But a recent study warned there is limited scope for gas expansion without CCS.

Yet the problem only comes to a crunch in a decade or two. For politicians on five-year terms, it is not a vote-winner or loser. That is particular true for the Conservatives, with CCS projects tending to affect safe Labour seats. They might accept the logic behind CCS, but pay no penalty at the polls for abandoning it.

After the decision, the government narrative shifted. Yes, Britain needs CCS, but no, it doesn’t need to be an early mover. Let’s wait until China does it at scale and then import the kit when it’s cheaper.

It is the one argument that gets Teesside Collective’s Mark Lewis exercised, raising his voice before – in true British style – apologising.

“You have got to build it where you have got to build it,” he fumes. “You are not going to import underwater reservoirs from China. There is nothing there that we need to import from China. I don’t think you get any substantial cost reductions by waiting. We have got an offshore industry here that is crying out for jobs and employment.”

The axed competition was to capture emissions from power generation. For industry, the case is different and arguably stronger. There are plenty of viable low carbon electricity sources, whereas options to neutralise CO2 from industrial processes are limited. That is particularly true of steel and cement production, but the hydrogen plans also reach hard-to-decarbonise places.

And after a year of savaging green policies, the Conservative government has narrowed its options for meeting that legally binding carbon budget. It is promising a new energy and climate policy package by the end of 2016.

Lewis says industrial CCS is on the agenda at the Treasury, prime minister’s office, business and energy departments. He is encouraged by conversations with government. But it will take more than a politician’s word to convince investors.

What’s the cost – and who pays?

Early analysis, funded by a £1 million government grant, suggests Teesside CCS could prevent CO2 emissions for £50 a tonne.

It’s a ballpark figure that has been superseded by events. The now-closed SSI steelworks accounted for a large chunk of the 56.5 million tonnes of CO2 they expected to capture over 20 years.

There is no shortage of emissions sources to replace it, but with steel out of the picture, the concept has evolved. Now, the buzzword is “hydrogen economy”. By capturing carbon at a big hydrogen plant rather than the back end of several different factories, there could be cost savings.

On the other hand, the cancellation of power CCS projects could push costs up, as Teesside can no longer piggyback on that infrastructure.

The industry has some incentive to invest, as insurance against future climate policies. At present, UK polluters get some free emissions permits and pay £22 a tonne for any extra needed – a surcharge on the EU carbon price.

The price is expected to rise by the time CCS would be up and running, but how much remains uncertain. And if it is higher than prices in other jurisdictions, multinationals could just as easily take their investment elsewhere.

Undoubtedly, government would need to offer a carrot as well as a stick. That could follow a similar model to the contracts offered for renewable energy, which guarantee a certain power price.

“What I think we can do is make sure we don’t throw the baby out with the bathwater.”

Terry Waldron, PR manager at Sembcorp, a partner in the Teesside Collective, is apologetic as he picks me up. He is not an expert on CCS. It is half term for schools and other candidates to show me round were on holiday.

Ask about Teesside’s industrial history, though, and there’s no stopping him. A journalist in the late 1980s before getting into corporate communications, he has experienced up close the upheaval of the past three decades.

From iron and steel in the 1800s, the big growth last century came in chemicals. Teesside was one of the heartlands of Imperial Chemical Industries, for much of its existence Britain’s biggest industrial company. It made everything from Perspex to paint.

Waldron joined the giant in 1990, thinking he had a job for life. But ICI was getting too big for its boots. The very next year, arch corporate raider Lord Hanson launched a takeover attempt. It failed, but marked a tipping point – ICI started selling off its disparate business.

“You had this cataclysmic change of ownership,” says Waldron. “Your lords and masters now could be in Houston or Salt Lake City, not your men in bowler hats. From being the hub where everybody came to, you were suddenly an outpost in somebody else’s empire.

“It was difficult at all levels, but we really made a good go of it. The fact there is still such a lot of industry now shows how good we have been at innovating and adapting.”

He takes me round the Wilton site, 2,000 acres of industrial land connected to North Tees by pipelines.

Sembcorp’s UK utilities division joined the Teesside Collective last October, replacing the closed-down SSI steelworks as an industrial partner. The others are BOC, Lotte Chemical and CF Fertilisers.

The Singapore-headquartered firm owns a small woodchip-fired steam and power plant, tacked onto the side of a decommissioned coal station. Across the way, it is building works to generate energy from waste collected in Merseyside, in partnership with Sita.

The biggest beast on the block is “the cracker”, making ethylene, propylene and butadiene – ingredients for everything from food packaging to detergent. Steam rises from vents along ground-level pipes, while a chimney flares surplus gases on the skyline. Owned by Saudi Arabia’s Sabic, it is not currently part of the CCS collective.

Waldron also shows off the empty plots, talking up their potential for development. “This is a great manufacturing area, with skilled people. It is what it is, it is not pretending to be anything else.”

In the market town of Guisborough, just outside Middlesbrough, modest terraced houses built for ironstone miners in the 1800s are now home to commuters.

Tom Blenkinsop MP’s office is distinguished by the Save Our Steel posters in the window. His constituency spans southern Middlesbrough and more rural – and well-to-do – villages of north Yorkshire.

A former official at trade union Community, Blenkinsop was propelled into politics after predecessor Ashok Kumar died suddenly in 2010. Redcar steel works was fighting for its future and the local Labour party wanted someone who could speak up for it.

That battle was decisively lost last September, despite Blenkinsop’s best efforts. And he lists half a dozen other local employers that have shut down. Each closure puts a strain on local authority budget, as tax take falls and demand for services increases.

“All we have done since September is have to make the case about how we need help and how it is difficult. You get sick of your own sob story. It is incredibly frustrating, when you know how much we could do here.”

“Culturally, it is in my DNA to make sure we have a manufacturing industry here”

Blenkinsop, who grew up in Middlesbrough, is proud to represent an area that makes things. “Culturally, it is in my DNA to make sure we have a manufacturing industry here.”

He sees little support for that from government, more interested in courting app developers and city slickers. Nor does he have much time for the “holier than thou” green lobby, which embraces steel-built wind turbines yet sees industry as corporations not allies.

“What we really need at the forefront is pro-British, pro-industry, pro-leading on climate change brave leadership.”

As such, he is keen on CCS. “Our area already has the know-how of capturing CO2. You would create jobs, you would attract people here. More than that, you are sending a clear signal to industry to come here and reduce your [carbon] taxes.”

His prescription for the area’s economic woes also includes extracting coal bed methane as a cheap fuel – not something you will find environmentalists endorsing. Even if CO2 is captured at the end of the chain, the process brings risks of methane leakage and water contamination.

But Teesside is no pristine wilderness. There are acres of empty post-industrial land that would be expensive to decontaminate. Blenkinsop wants to put them to work.

Back in Westminster, Belinda Perriman is trying to inject some urgency into the process.

“I am drafting an email to Norway [Statoil], offering them our storage site, just to try and goad the UK government into action,” she confides.

This is about the potential destination for Teesside’s CO2, under the North Sea. The offshore rigs and pipelines that used to pump oil and gas to the mainland could be repurposed to send CO2 in the other direction. If not maintained, however, they are due for decommissioning as wells are depleted.

Shell’s Goldeneye platform, which stopped producing gas in 2011, was lined up as storage for the Peterhead project. Now that has been cancelled, its future is uncertain.

Perriman, who led on the Peterhead scheme for Shell before joining the Teesside Collective, argues this infrastructure needs to be held open. Building from scratch costs. “They will be consciously setting back CCS 10 years if they do nothing.”

“You can either decarbonise industrial areas of the UK or the government accepts we allow them all to die and reskill the labour force.”

The discussions with Norwegian oil and gas company Statoil, which already uses CCS, may prompt Britain to consider the strategic value of these reservoirs.

Again, there is the potential to keep on at least some jobs, as the offshore sector suffers from low oil prices and dwindling reserves.

Meanwhile, Perriman thinks a deal is within reach for another £250,000 of government funding – although after months of negotiation, there is nothing in writing. It is half the sum the collective asked for, with lots of work to do fleshing out the concept.

Full operation is some way off. To get there will involve detailed engineering plans, costing in the tens of millions, plus regulatory approvals. Perriman is reluctant to suggest a date, but when pressed puts it in the late 2020s.

Her point to leaders is they need to decide now whether to keep a clean industrial future on the table. “You can either decarbonise industrial areas of the UK or the government accepts we allow them all to die and reskill the labour force.”

On Teesside, there is clearly a will to keep industry alive.

Middlesbrough College, its large shiny campus right by the train station, is churning out technically qualified youngsters. The news pages are filled with upbeat stories of redundant steel workers retraining in related skills like electrical safety.

It is not clear what could replace chemicals at the heart of the northeast economy. Alternatives in service sectors tend to be precarious and poorly paid.

How concerned Westminster is with sustaining this child of England’s enterprise is another question.

Tory grandee Lord Michael Heseltine was appointed last November to chair a panel on the region’s employment crunch. He didn’t want to “raise false hopes,” he told local media. Manufacturing may be part of Teesside’s heritage, but it’s “a relatively small part of the whole” today.

It makes no difference to the climate where the emissions come from – or not. But if the birthplace of the industrial revolution won’t take a lead, who will?