Government launches vision for a world-leading UK hydrogen economy


The government has unveiled its plans to create a thriving low carbon sector in the UK over the next decade and beyond, after launching its long-awaited vision to kickstart a world-leading hydrogen economy.

On 17 August, it released the UK’s first-ever Hydrogen Strategy, building on commitments from the 10-point plan for a Green Industrial Revolution, which signalled an ambition for 5GW of low carbon hydrogen production capacity by 2030. The approach is based on the UK’s previous success with offshore wind, where government action combined with strong private sector support led to the UK establishing itself with world-leading status.

A UK-wide hydrogen economy could be worth as much as £900mn and support over 9,000 jobs by 2030, with these figures rising to £13bn and 100,000 respectively by 2050. It could also be key to reaching net zero, with government citing its own analysis that found 20-35% of the UK’s energy consumption could be hydrogen-based by 2050, and that a low-carbon hydrogen economy in the UK could deliver emissions savings equivalent to the carbon captured by 700mn trees as soon as 2032.

The strategy, therefore, adopts a twin-track approach and supports both green and blue hydrogen production, with government to offer further detail in 2022 on its production strategy. It also pledges to collaborate with industry to develop a UK standard for low carbon hydrogen, as well as to assess the safety, technical feasibility and cost effectiveness of mixing 20% hydrogen into the existing gas supply. Elsewhere, it commits to undertaking a review to support the development of the necessary network and storage infrastructure to underpin a thriving hydrogen sector and to launch a hydrogen sector development action plan in early 2022, outlining how government will support companies to secure supply chain opportunities, skills and jobs in hydrogen.

Alongside the Hydrogen Strategy, consultations have been published on Low Carbon Hydrogen Standards, a Net Zero Hydrogen Fund, and Hydrogen Business Models. Full in-depth write-ups will follow.

The government has also unveiled a £105mn funding package through the Net Zero Innovation Portfolio, marking a first step to building up Britain’s low carbon hydrogen economy.

This will support a £55mn Industrial Fuel Switching Competition, supporting development and trials of solutions to switch industry from high to low carbon fuels, such as clean hydrogen; a £40mn Red Diesel Replacement Competition, offering grant funding for the development and demonstration of low carbon alternatives to diesel for the construction, quarrying and mining sectors; and a £10mn Industrial Energy Efficiency Accelerator, providing funding to clean technology developers to work with industrial sites to install, test and prove solutions for reducing UK industry’s energy and resource consumption.