Businesses call on UK Government to deliver 'world-leading' hydrogen sector
Businesses do not believe the Government is being ambitious enough in efforts to create a "world-leading" hydrogen market, with the commitment of 5GW of green and blue hydrogen by 2030 failing to generate confidence within the private sector.
Under the Government’s Ten Point Plan, the UK will aim to generate 5GW of low-carbon hydrogen production capacity by 2030. Up to £500m will be invested in a bid to create a Hydrogen Neighbourhood in 2023, a Hydrogen Village by 2025 and to create the first town running entirely on hydrogen.
However, the Hydrogen Strategy Now cross-industry group has called for the Government to raise efforts to unlock greater green hydrogen capacity. The group consists of more than 120 businesses that employ more than 100,000 people in the UK, with a combined net worth of £150bn.
A survey of group members found that more than 75% do not believe the Government’s 5GW aim is ambitious enough. In addition, 81% of respondents felt the UK was failing to meet its potential regarding the technology.
UK Hydrogen’s chair Chris Jackson said: “The UK has all the ingredients to be a world-leading hydrogen economy, creating jobs, economic growth and accelerating the transition to net-zero. Sadly, the results of this survey show that the Government needs to go further and faster in its development of an appropriately ambitious hydrogen policy framework, to support industry and unlock the UK’s potential.
“A clear takeaway from this survey is that the Government could create greater confidence and interest in the UK market by significantly increasing its hydrogen production targets, both for 2025 and 2030. If the Government’s ambition is to create a world-leading hydrogen market, then having world-leading targets is key, as is a detailed policy that shows close coordination between different government departments.”
Earlier this year, the Nuclear Industry Council (NIC) and Nuclear Industry Association (NIA) published a roadmap outlining how the UK could co-locate electrolysis at 12-13GW of nuclear reactors. This commitment could enable the production of 75TWh of green hydrogen by 2050, the bodies claim. The groups are calling for more R&D funding, higher carbon pricing and new financing models to help bring the cost of green hydrogen down to parity with fossil-based hydrogen, which currently represents more than 95% of global annual production.
MPs on the Environmental Audit Committee (EAC) highlighted the need for a Hydrogen Strategy through their latest briefing on the green recovery. The briefing states that many in the private sector do not feel that the UK’s green hydrogen sector is ‘investable’ yet, as the Ten Point Plan only provides limited and short-term support.
Additionally, the Hydrogen Taskforce was set up in March 2020, led by Shell and BP, and is lobbying for the UK Government to invest £1bn to boost hydrogen production in the UK. The Taskforce believes that the UK can be home to a “world-leading hydrogen economy” by investing £1bn in hydrogen production, distribution and storage projects that could be used for transport and heating and blended into the gas grid.
The Taskforce has called for amendments to be made that would enable hydrogen to be blended into UK gas grids and for the UK government to support trials for hydrogen-ready boilers and hydrogen refuelling stations for road transport by 2025. The Taskforce published research finding that utilising hydrogen production could generate £18bn for the UK economy and support more than 75,000 jobs over the next 15 years.