UK releases its first-ever Hydrogen Strategy

19 August 2021

The UK Department for Business, Energy & Industrial Strategy (BEIS) on 17 August released its Hydrogen Strategy. BEIS said the UK’s first-ever Hydrogen Strategy drives forward the commitments laid out in the Prime Minister’s ambitious 10 Point Plan for a green industrial revolution by 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.

“A booming, 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, BEIS noted in a press release. “With government analysis suggesting that 20-35% of the UK’s energy consumption by 2050 could be hydrogen-based, this new energy source could be critical to meet our targets of net zero emissions by 2050 and cutting emissions by 78% by 2035 – a view shared by the UK’s independent Climate Change Committee. In the UK, a low-carbon hydrogen economy could deliver emissions savings equivalent to the carbon captured by 700 million trees by 2032 and is a key pillar of capitalising on cleaner energy sources as the UK moves away from fossil fuels.”

UK Energy & Climate Change Minister Anne-Marie Trevelyan said:

Today’s Hydrogen Strategy sends a strong signal globally that we are committed to building a thriving low carbon hydrogen economy that could deliver hundreds of thousands of high-quality green jobs, helps millions of homes transition to green energy, support our key industrial heartlands to move away from fossil fuels and bring in significant investment.”

The government’s approach is based on the UK’s previous success with offshore wind, including the Contracts for Difference (CfD) scheme. Alongside the Hydrogen Strategy, the government also launched a public consultation on a preferred hydrogen business model “which, built on a similar premise to the offshore wind CfDs, is designed to overcome the cost gap between low carbon hydrogen and fossil fuels, helping the costs of low-carbon alternatives to fall quickly, as hydrogen comes to play an increasing role in our lives.” In addition, the government is consulting on the design of the GBP240 million ($330m) 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 Hydrogen 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 giving certainty to producers and users that the hydrogen the UK produces is consistent with net zero while supporting the deployment of hydrogen across the country;
  • 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 government also announced a GBP105 million funding package through its Net Zero Innovation Portfolio that will act as a first step to build up Britain’s low carbon hydrogen economy. The investment will help industries to develop low carbon alternatives for industrial fuels, including hydrogen, which will be key to meeting climate commitments.

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. These 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. BEIS noted that, if a positive case is established, by 2035 hydrogen could be playing a significant role in heating, transport and industry.

In his Foreword to the 121-page Hydrogen Strategy document, Business & Energy Secretary Kwasi Kwarteng said: "We have developed the first ever UK Hydrogen Strategy to set out clearly the key steps we need to take in the coming months and years to deliver against the promise that hydrogen presents - an exciting moment for technology providers, energy companies large and small, investors, innovators, and government at all levels." He added: “Taken together, the UK Hydrogen Strategy and supporting policy package lay the foundations for a thriving hydrogen economy, one that can support our trajectory to achieving our world-leading Sixth Carbon Budget and net zero commitments.” 

The Strategy notes: “The scale of the challenge is clear: with almost no low carbon production of hydrogen in the UK or globally today, meeting our 2030 ambition and delivering decarbonisation and economic benefits from hydrogen will require rapid and significant scale up over coming years. The work starts now.”

Chapter 1 of the Strategy sets out the case for low carbon hydrogen.

Chapter 2 sets out a holistic approach to developing the UK hydrogen economy, including a 2020s roadmap. Chapter 3 explains “how we will work to secure economic opportunities across the UK that can come from a thriving hydrogen economy. Chapter 4 shows how the UK is working with other nations to drive global leadership on the development of low carbon hydrogen. Finally, Chapter 5 sets out “how we will track our progress to ensure we are developing a UK hydrogen economy in line with the principles and outcomes set out in Chapter 1 and our roadmap in Chapter 2.”

With respect to nuclear, the Strategy makes clear, throughout that in future, nuclear will play a significant role in hydrogen production. “From the 2030s onwards, we may see a wider range of production technologies coming to the market including more hydrogen from nuclear, using low carbon heat and power from small modular and advanced modular reactors, as well as bio-hydrogen with CCUS [carbon capture, use and storage] that can deliver negative emissions. A dynamic market will include multiple sources and end uses for hydrogen.”

Nuclear Industry Association CEO Tom Greatrex said: "The Strategy confirms that nuclear reactors - large, small, current and advanced - have a critical role in producing low-carbon hydrogen." He added: "Nuclear is the only source of energy that can produce clean power and clean heat, making it a vital component as we decarbonise sectors beyond electricity. "Whether labelled as 'green' or 'low-carbon', it's only hydrogen from zero emissions sources like nuclear and renewables that can make a meaningful long-term impact on decarbonisation. The government must now swiftly implement a new financing model for nuclear to cut costs, move forward with Sizewell C, and continue to support the development of modular reactors, to ensure nuclear is part of a strong low-carbon hydrogen mix."

Privacy Policy
We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.