Hydrogen

Because of its geography, geology, infrastructure and capabilities, the UK can show global leadership in low-carbon hydrogen and secure competitive advantage.

The twin track approach capitalises on the UK’s potential to produce large quantities of both electrolytic green hydrogen and CCUS-enabled blue hydrogen. Building hydrogen production and enabling use across multiple sectors will be critical for developing domestic capacity and capabilities and securing green jobs.

The UK also has decades of experience in production, distribution, storage, use and regulation of gas. The widespread use of natural gas for power generation and for heat in industry and homes means that the UK has potential supply routes and many potential use cases for hydrogen gas.

The UK also has favourable geology for large-scale storage of hydrogen and is already storing hydrogen in salt caverns and exploring storage in disused oil and gas fields under the North Sea.

The UK has one of the most mature hydrogen markets globally according to the Hydrogen Council’s Hydrogen Insights Report 2021.

The UK has six industrial clusters:

• Liverpool City Region (Merseyside)
• Grangemouth (Scotland)
• Solent (Southampton)
• Wales
• Tees Valley
• Humber

These will be the starting point for a new carbon capture industry and support up to 50,000 jobs in the UK by 2030.

Despite the maturity of the UK market, it still requires a significant scaling-up of production capacity to meet net zero targets set out by the UK government.

Located across the country, the six industrial clusters that will be the starting point for a new carbon capture industry and support up to 50,000 jobs in the UK by 2030. The clusters include:

Liverpool City Region

Assets: SMR and Electrolyser production facilities.

Investment opportunities: LCR Hydrogen Bus project and HyNet blue hydrogen production.

Grangemouth

Assets: include existing pipelines connecting major industrial hub connecting Scotland to mainland Europe.

Investment opportunities: at the power station for CCS in Peterhead.

Solent

Assets: include H2 Research and Refuelling Station.

Investment opportunities: the hydrogen super-hub in the port of Southampton is a key investment opportunity at the Solent cluster.

Wales

Assets: include Energy Kingdom at Milford Haven (blue hydrogen) and energy hub at Holyhead.

Investment opportunities: include the Hydrogen Highway and ports infrastructure.

Tees Valley

Assets: include existing underground hydrogen storage and Teesside Freeport.

Investment opportunities: include a first of its kind Hydrogen Transport Hub at Tees Valley.

Humber

Assets: include empty gas and salt caverns for hydrogen storage and Equinor’s H2H Saltend.

Investment opportunities: include shared hydrogen pipeline and Green hydrogen projects such as Gigastack.

Growth of low carbon hydrogen will be supported by the following.

A £1 billion Net Zero Innovation Portfolio, which will invest in 10 priority areas, including hydrogen, floating offshore wind, advanced modular nuclear reactors, energy storage solutions and CCUS solutions.

The £240 million Net Zero Hydrogen Fund supports the development of both blue and green hydrogen production capacity.

Policies supporting the growth of low carbon hydrogen in the UK include:

• Low Carbon Hydrogen Supply Competition – provided £33 million to accelerate the development of low-carbon, bulk-hydrogen supply solutions in key sectors.
• Industrial fuel switching policy – competition funding projects that demonstrate potential for industrial GHG emission reductions via fuel-switching technologies, to contribute to net zero by 2050.
• Industrial Decarbonisation Challenge Fund – provides £170 million, matched by £261 million from industry, to invest in developing technologies such as CCUS and hydrogen fuel switching.