UK Government Towards A Hydrogen Economy

Posted on 02 October 2023

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Thanuja Bandara
Engineering Analyst – RE24

Comes from a background of Chemical Engineering and specialised in energy market research and biofuel techniques.

Today, the United Kingdom is one of the global leaders in the innovation and application of hydrogen as a carbon-free energy source. However, it was not the same a few years ago. When looking back, the government’s involvements do not have a very long history but an important one. 

In this article, we will brief you the UK government’s initiatives, strategies and approaches to upscale the UK hydrogen economy.   

UK’s First Strategy For A Hydrogen Economy

UK launched their first hydrogen strategy in August 2021. The main goal was to produce 5GW of low-carbon hydrogen by 2030. This involves £4 billion investment, and new 9,000 jobs. By 2050, these numbers are projected as £13 billion 100,000 along with 25-30% of the energy consumption from hydrogen.   

The government updated the strategy in 2022. This time, they doubled the target. 10GW of low-carbon hydrogen by 2030. At least half of that production is expected from the electrolysis generation method (green hydrogen).   

In 2023, they updated the strategy again. 1GW of green hydrogen and 1GW by Carbon Capture, Utilization, and Storage (CCUS) was added to the target. 

Rules And Regulations   

Strategy update in 2023 states the government’s advances in developing detailed and technical policies and regulations. These include; 

1. Managing consultations on a low-carbon hydrogen certification scheme 
2. Proposals for revenue support regulations concerning the Hydrogen Production Business Model (HPBM)
3. The Energy Bill containing many hydrogen-related aspects, is also progressing through Parliament. These include removing hydrogen levy from the households.
4. BESS setting up a certification scheme for low-carbon hydrogen by 2023. This will provide users reliable and verified description of emission intensity of hydrogen they use.

Following the commitment made by the British Energy Security Strategy (BESS) to set up a certification scheme for low-carbon hydrogen by 2025, the government has published consultations involving that scheme. These certificates are expected to give the hydrogen users a reliable, verified description of the emissions intensity of the hydrogen they use. It would benefit the entire hydrogen value chain.   

An updated version of the Low Carbon Hydrogen Standard was published in April 2023, including the introduction of a materiality threshold to ease the reporting and verification burden; a waste fossil feedstock counterfactual emissions methodology to reflect their system-wide emissions benefits; a revised process for including new technology pathways; and a new chapter on consignments.   

Funding And Assistance Given By The Government 

The government has introduced many funding programs and competitions to develop hydrogen-based innovative projects.   

1. Net Zero Hydrogen Fund (NZHF) – Announced fifteen successful projects and granted £37.9 million in May 2023. A second application round for NZHF has already been launched.  
2. Hydrogen Allocation Rounds (HAR) (rounds 1 and 2) and the Hydrogen Production Business Model (HPBM) – Assists more than twenty other projects. P
3. Powering up Britain- Energy Security Plan – Out of the eight selected projects under one is for CCUS-enabled hydrogen and industrial carbon capture and power technologies.  
4. Net Zero Innovation Portfolio Low Carbon Hydrogen Supply – Granted £19.4 million for five winners.
5. Hydrogen BECCS Innovation Programme competition – Published 22 project summary reports in June 2023 under phase 1. Under phase 2, five more projects have been published and awarded £21.2 million to convert biomass and waste into hydrogen with carbon capture.
6. Industrial Energy Transformation Fund (IFTF) – More grants for hydrogen-based projects. 

Action Plan For UK Hydrogen Economy

In the action plan published by the government, four key areas were highlighted,  

1. Including private investment across the value chain to unlock hydrogen projects  
2. Strong UK supply chains to support domestic hydrogen projects and those overseas 
3. A skilled UK workforce to deliver the hydrogen projects at the right time 
4. Enabling the UK hydrogen sector to participate in international trade of hydrogen-related goods and services.   

With global awareness and government interference, it is noticeable that hydrogen has been developing as a fuel in various sectors, including power, heat, and transportation in all roads, maritime, and aviation sectors.