The Government has published the UK’s first-ever Hydrogen Strategy setting the foundation for how the UK government will work with industry to meet its ambition for 5GW of low carbon hydrogen production capacity by 2030.

According to the Department for Business, Energy & Industrial Strategy, tens of thousands of jobs, billions of pounds in investment and new export opportunities will be unlocked through government plans to create a thriving low carbon hydrogen sector in the UK over the next decade and beyond.

A UK-wide hydrogen economy could be worth £900 million and create over 9,000 high-quality jobs by 2030, potentially rising to 100,000 jobs and worth up to £13 billion by 2050.

By 2030, hydrogen could play an important role in decarbonising polluting, energy-intensive industries like chemicals, oil refineries, power and heavy transport like shipping, HGV lorries and trains, by helping these sectors move away from fossil fuels.

Government analysis suggests that 20-35% of the UK’s energy consumption by 2050 could be hydrogen-based and that this new energy source could be critical to meet targets of net zero emissions by 2050 and cutting emissions by 78% by 2035.

Launching the Hydrogen Strategy, Business & Energy Secretary Kwasi Kwarteng said:

“Today marks the start of the UK’s hydrogen revolution. This home-grown clean energy source has the potential to transform the way we power our lives and will be essential to tackling climate change and reaching Net Zero.

“With the potential to provide a third of the UK’s energy in the future, our strategy positions the UK as first in the global race to ramp up hydrogen technology and seize the thousands of jobs and private investment that come with it.”

Energy & Climate Change Minister Anne-Marie Trevelyan said:

“The government’s approach is based on the UK’s previous success with offshore wind, where early government action coupled with strong private sector backing has earned the UK a world leading status. One of the main tools used by government to support the establishment of offshore wind in the UK was the Contracts for Difference (CfD) scheme, which incentivises investment in renewable energy by providing developers with direct protection from volatile wholesale prices and protects consumers from paying increased support costs when electricity prices are high.”

The government has today launched a public consultation on a preferred hydrogen business model built on a similar premise to the offshore wind CfDs which is designed to overcome the cost gap between low carbon hydrogen and fossil fuels.

Alongside this, the government is also consulting on the design of the £240 million Net Zero Hydrogen Fund, which aims to support the commercial deployment of new low carbon hydrogen production plants across the UK.

Other measures included in the Strategy include:

outlining a ‘twin track’ approach to supporting multiple technologies including ‘green’ electrolytic and ‘blue’ carbon capture-enabled hydrogen production, and committing to providing further detail in 2022 on the government’s production strategy

• collaborating with industry to develop a UK standard for low carbon hydrogen
• undertaking a review to support the development of the necessary network and storage infrastructure to underpin a thriving hydrogen sector
• working with industry to assess the safety, technical feasibility, and cost effectiveness of mixing 20% hydrogen into the existing gas supply
• launching a hydrogen sector development action plan in early 2022 setting out how the government will support companies to secure supply chain opportunities, skills and jobs in hydrogen

The launch of the Hydrogen Strategy has been widely welcomed by a wide range of organisations across multiple industrial sectors. 

Chief Executive at SSE Alistair Phillips-Davies commented:

“We strongly welcome the publication of this first-ever Hydrogen Strategy and hope to turn this encouraging strategy into firm and rapid action through our exciting plans. These include working with Equinor on the world’s first major hydrogen-fired power station at Keadby and developing hydrogen storage caverns at Aldbrough, as well as our partnership with Siemens to co-locate hydrogen production facilities at our wind farms. The strategy is a welcome first step to realising the potential of hydrogen.”

The influential House of Commons Environmental Audit Committee (EAC) has also welcomed publication of the strategy. 

In August last year the Committee Chairman, Rt Hon Philip Dunne MP, wrote to Business Secretary Alok Sharma setting out the EAC's concerns that the lack of a Hydrogen Strategy and the lack of clear vision from Government risked “scuppering progress” for hydrogen to play a key role in developing the UK's low carbon energy mix.

 Commenting on today's publication of the UK Hydrogen Strategy, Philip Dunne said:

"I welcome the eagerly awaited Hydrogen Strategy, which finally gives industry some clarity on the Government’s intention for hydrogen in our low carbon energy mix. When our Committee undertook work on hydrogen last year, we heard that the UK is ahead in terms of technology and understanding, but lacked demand signals from Government through a Hydrogen Strategy required to compete in the global hydrogen economy.

"While I welcome this step forward, I have to say it is disappointing that only now – after being promised the Strategy in November last year – are the necessary consultations being launched on how to overcome funding issues and how to define ‘low carbon’ hydrogen. These critical issues should have been ironed out in advance of this Strategy. I urge the Government to act swiftly on the outcomes of these consultations. The UK has a strategic advantage from the prospect of generating green hydrogen from surplus offshore renewable energy generation, but the opportunity should not be missed.

“Reflecting our calls last year, I welcome the Government’s move to look into the blending of hydrogen into the existing gas supply. While the twin track approach proposed, supporting both green and blue hydrogen production, is positive, it is also important that substantial capacity for carbon capture is developed, so as to avert release of damaging emissions currently created in blue hydrogen production. At present 95% of hydrogen produced worldwide uses fossil fuel feedstocks, and without action to stem the emissions entailed, the use of hydrogen on the scale envisaged by Government will unlikely get us to Net Zero Britain.”

The UK government is already working with the Health and Safety Executive and energy regulator Ofgem to support industry to conduct first-of-a-kind hydrogen heating trials. The trials along with the results of a wider research and development testing programme will inform a UK government decision in 2026 on the role of hydrogen in decarbonising heat. If a positive case is established, by 2035 hydrogen could be playing a significant role in heating people’s homes and businesses.

The Hydrogen Strategy is one of a series of strategies the UK government is publishing ahead of the UN Climate Summit COP26 taking place in Glasgow this November. The UK government has already published its Industrial Decarbonisation Strategy, Transport Decarbonisation Strategy and North Sea Transition Deal, while its Heat and Buildings and Net Zero Strategies will be published this year.

Today’s Hydrogen Strategy package also contains further detail on different ways to produce hydrogen and technical cost projections of each technology out to 2050.