The UK has the potential to become a global leader in the adoption of hydrogen, but it will call for a bolder vision, a report has said.
On 2 August, Xodus published a report, The UK – the Global Hydrogen Centre, calling for UK companies to adopt a bolder approach to hydrogen, take the lead in Europe and become global players, gaining first-mover advantages resulting from an ambitious hydrogen development programme. The UK is ideally placed geographically, technically, financially and politically to become a global low carbon hub for blue and green hydrogen production and export, though needs action if it is to realise its potential.
It stressed the need for a holistic approach, given the diversity of potential hydrogen customers, mapping out how the challenge facing government to enable the rapid development of a hydrogen economy is incentivising investments into production while creating demand to transfer risk away from investors. A lack of conveniently available supply and limited, costly consumer choices are also barriers hydrogen must overcome.
Subsidies and taxation are both necessary to support a conversion from fossil fuels to low carbon hydrogen. Carbon taxation can be used to facilitate both the supply and demand side of the industry, though must be considered carefully to ensure industry does not become less competitive than its international competitors or materially increase costs to consumers. The approach towards hydrogen subsidies, meanwhile, should take the lead from offshore wind, where ROC and CfD auctions have proven successful, though should also include legalised local content requirements.
Having a clear intent to become a global centre for low carbon hydrogen production, as well as a matching policy framework, would also serve to re-establish economic opportunities from offshore wind, build up UK low carbon hydrogen and CCUS infrastructure to be the dominant European player, offer the opportunity to develop new industry and technology with an abundance of hydrogen produced at lower cost, enable increased opportunities for the production of lower carbon components and steel within the UK, and see existing oil and gas infrastructure repurposed.
It also called for UK gas companies to be included in national hydrogen planning, while recommending all significant hydrogen and green energy projects are placed under a critical national infrastructure planning process. This would serve to accelerate, allowing the UK to cash in on its unique position for low carbon hydrogen production and gain first-mover advantages, and see local concerns overridden for the “national and global good”.
