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The government’s hydrogen strategy – a quick guide for businesses

Hub Team
The UK government published its Hydrogen Strategy. Here’s our guide to how, why, and where it will play in decarbonising the UK economy.

The government’s hydrogen strategy – a quick guide for businesses

The UK government published its highly anticipated Hydrogen Strategy this week, which sets out a roadmap for scaling up low carbon hydrogen production to meet net zero.

Here’s our brief guide to hydrogen: how, why, and where it will play an important role in decarbonising the UK economy.

Why hydrogen?

The government has identified hydrogen as one of a handful of new, low carbon solutions that will be critical for meeting the UK’s targets of net zero emissions by 2050 and cutting emissions by 78% by 2035 – a view shared by the Climate Change Committee which advises government.

As part of a renewable energy system, low carbon hydrogen could be a versatile replacement for high-carbon fuels used today – helping to bring down emissions in vital UK industrial sectors and providing flexible energy for power, heat and transport.

What is the government’s hydrogen goal?

The government wants to create 5GW of low carbon hydrogen production capacity by 2030. This could produce hydrogen equivalent to the amount of gas consumed by over 3 million households in the UK each year and would deliver total emissions savings of around 41MtCO2 e between 2023 and 2032, equivalent to the carbon captured by 700 million trees over the same time period.

Hydrogen can support the deep decarbonisation of the UK economy, particularly in ‘hard to electrify’ UK industrial sectors

What is hydrogen, and what’s the difference between ‘blue’ and ‘green’?

Hydrogen is a clean alternative to methane (natural gas), and it’s a very abundant element on our planet. It’s present in nearly all molecules in living things, but the challenge is that it’s very scarce as a gas. This means that if we are to use it as a fuel, it must be manufactured.

The most common production route is steam methane reformation, where natural gas is reacted with steam to form hydrogen. This is a carbon-intensive process, but one which the government says can be made low carbon through the addition of carbon capture, usage and storage (CCUS) – producing a gas often called ‘blue hydrogen’.

Hydrogen can also be produced through electrolysis, where electricity is used to split water into hydrogen and oxygen – gas from this process is often referred to as ‘green hydrogen’.

Today most hydrogen produced and used in the UK and globally is high carbon, coming from fossil fuels with no carbon capture; only a small fraction can be called low carbon. For hydrogen to play a part in our journey to net zero, all current and future production will need to be low carbon.

What’s the government’s approach to hydrogen?

The UK has committed to a ‘twin track’ approach to hydrogen production, supporting both electrolytic (“green”) and CCUS-enabled (“blue”) hydrogen, as it believes this is what is needed to deliver the level of hydrogen needed to meet net zero. Blue hydrogen is a contentious topic though – with one industry expert citing concerns that it will lock in our reliance on fossil fuels.

The Hydrogen Strategy outlines a range of policies and initiatives already underway, and other commitments which will be taken forward over the coming years to scale up production.

CCUS-enabled hydrogen production is currently cheaper than electrolytic hydrogen, but costs of the latter are expected to come down and could be cost competitive with CCUS-enabled by 2025.

What will hydrogen eventually replace?

Low carbon hydrogen is suited for use in a number of sectors where electrification is not feasible or is too costly, and other decarbonisation options are limited.

This includes its use in heavy industry – such as generating high temperature heat for furnaces, and to fuel long-distance and heavy-duty transport. It could also play an important part in heating buildings – particularly our homes, which are largely heated by natural gas.

It could also be useful in areas where the flexibility and stability of a gas is valued, for example large scale or long duration energy storage and flexible power generation.

What’s already happening?

There are several pioneering projects happening across the UK to drive forward the hydrogen agenda, and the Strategy showcases these. They include the development of hydrogen-powered buses by Wrightbus in Belfast, and a project by Hanson Cement in Port Talbot, exploring how hydrogen from renewable energy can help decarbonise cement manufacturing.

How can businesses get ahead with the hydrogen revolution?

The Strategy outlines a raft of measures that will accelerate the use of hydrogen across 4 main areas: power, industry, transport and buildings.

If your business operates within these sectors, you may be able to take advantage of grant funding that aims to develop hydrogen technology and support the business transition.

We’ve outlined the key pledges and funding opportunities below:

Industrial sector

Transport:

Heat in buildings:

Power

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