Freeports

Exploring the growing potential of Freeports to boost place-based decarbonisation

Freeports are special economic zones offering tax and customs benefits to the businesses based within them. They aim to promote regional economic growth and promote levelling up, through investment and trade, and to act as hubs for green growth.

Freeports are designed to reduce economic friction from post-Brexit customs and tax systems, and to act as innovation hubs to spur development in low-carbon technologies.

A partnership between Teesside University, Lancaster University, and regional stakeholders is now exploring the concept of CarbonFreeports. Together, we are examining policy alignments between the Freeports Strategy and UK Government commitments to low carbon investment towards Net Zero goals. We wanted to see how CarbonFreeports might stimulate low-carbon forms of mobility, innovation in infrastructure transport development, better planning and practice, and improve socio-economic and environmental justice outcomes for communities in the North of England.

Challenge

At Teesside University, one of our long-term goals is to transform the lives of underserved communities in our region, empowering them to generate a sense of pride, cohesion and innovation. This sparked our initial interest in Freeports, specifically with regards to what happens in and around the port as well as attracting green industries to grow the local economy.

Our aim was to bring together experts, stakeholders, and local organisations to examine the challenges and opportunities a CarbonFreeport may provide. There were however a range of issues to address. We identified that a ‘cycle of hype’ has grown around Freeport development, where initial over-enthusiasm about the economic and social benefits of Freeports risks dwindling interest in the policy in subsequent years. We aimed to ensure that our research partnership brought together a broad spectrum of stakeholders to promote the most effective pathways to a just transition for local communities living around Freeport sites in Teesside and Liverpool.

Solution

Our solution was an 18-month project examining the potential of CarbonFreeports to boost green investment, low-carbon transport, and to connect policy and industry stakeholder in developing a net zero Freeport strategy.

We looked at three areas. Firstly, we wanted to implement a place-based analysis of Freeports, opening an enduring policy window to prioritise the decarbonisation of regional shipping, air freight and regional development and innovation hubs.

Secondly, we looked to co-produce a policy framework to integrate decarbonisation, environmental quality and social sustainability strategies into local Freeport development.

Finally, we looked at ways to scale up the place-based regional CarbonFreeport strategy from Teesside and Liverpool cases to influence national policy around the government’s economic, levelling-up and decarbonisation goals.

Researchers interviewed a range of actors who plan and develop Freeports, such as local authorities and councillors, environmental justice organisations and citizens groups. Explicit focus was placed on policy-relevant findings around socio-economic regeneration, transport decarbonisation and place-based environmental justice, so we combined this with findings from broader activities like local stakeholder workshops and online webinars.

Our activities were based around the principle of “appreciative inquiry,” an organisational development tool where participants are asked to identify what is positive or what ‘works.’ This encourages a more open-ended, imaginative, and strategic discussion that in turn helps identify the best course of action to achieve positive organisational or place-based change.

Impact

We identified a range of challenges for the CarbonFreeport concept. While Freeports were found to potentially boost low-carbon innovation through economic agglomeration (i.e. clustering net-zero industrial innovation together), like other special economic zones there is a risk that the low tax and tariff incentives simply ‘poach’ economic investment from other regions, rather than creating new jobs and investment opportunities.

To promote high-quality jobs in net zero industries, Freeports must retain a positive, ambitious strategy, promoting broader stakeholder engagement beyond a small number of businesses and local authority representatives. This will ensure environmental justice in site planning, improve decision-making, enhance credibility, and contribute to a just transition for the regions that support the Freeport sites.

From an infrastructure perspective, Freeports have had little impact to date on infrastructure networks such as electric vehicle charging, improved rail, road or shipping freight networks. There is also a strong risk of carbon-intensive ‘lock-in’ within freight and commuting networks to and from Freeport sites if low carbon infrastructure investment and growth lags behind the manufacturing and shipping capacity of Freeport industries.

Finally, many of the biggest areas of concern for interviewed stakeholders were political. Transparency and good governance in Freeport site development requires better engagement across every level of government, Many local politicians and industry representatives felt ill-informed about Freeport strategy and disengaged from its development.

The initial fanfare around Freeport policy risks a ‘cycle of hype’ leading to disappointment and political abandonment in the future. We also found that levelling up strategies must acknowledge Freeports benefit certain geographies and not others – i.e. affluent neighbourhoods from which high skilled workers are drawn may gain the benefits, whereas poorer residents living near to Freeport sites bear the risks associated with increased air pollution, traffic, noise and light pollution.

Our partnership showed that exploring how these environmental injustices can be addressed is critical to a fair CarbonFreeport strategy that benefits all communities affected by these powerful regional economic development instruments.