The UK Hydrogen Strategy provides a welcome route map for the sector but there’s still much more work to be done

August was a big month for the hydrogen industry with the long-awaited publication of the UK ‘s first ever Hydrogen Strategy.

The strategy showed how far the industry has come in convincing policymakers about the potential benefits of hydrogen within a very short time. It set out a clear direction of travel, with policy commitments set to unlock over £4 billion in investment and create thousands of jobs by the end of the decade. The government will support multiple technologies by taking a twin track approach to ‘green’ hydrogen, produced by using electrolysers powered with renewable energy, and ‘blue’ hydrogen production, enabled by carbon capture processes. The strategy contained funding options for hydrogen projects across the supply chain, including a £240 million Net Zero Hydrogen Fund, and a “preferred Hydrogen Business Model” will be designed to overcome the cost gap between low- carbon hydrogen and fossil fuels.

Still, the industry’s journey is far from over. Before the policy framework is finalised, there will be formal consultations on the preferred Hydrogen Business Model and the Net Zero Hydrogen Fund, as well as a ‘UK Low Carbon Hydrogen Standard’ and a hydrogen production strategy. A decision on using hydrogen for home heating has been put off until 2026. And the 5GW target may yet be increased. These provide the industry with a big opportunity to shape government policies on hydrogen. Government and the industry will need to work together to deliver the policies needed to support innovation, boost investment, and scale up low-carbon hydrogen in the 2020s.

The Hydrogen Strategy highlighted another, parallel challenge: the need for both the industry and government to look beyond Whitehall to achieve these goals. Local authorities will be important in ensuring adoption of hydrogen at the local level. The supply chain will need to scale up and reskill the hydrogen sector. And of course, public buy-in will ultimately be needed. The sector is increasingly aware of these imperatives and the government’s strategy contained a welcome commitment to work with industry, trade unions, the devolved administrations, local authorities, and enterprise agencies to support sustained and quality jobs.

Both industry and government seem to have their work cut out. Research over recent years has found that public knowledge of hydrogen and hydrogen blending is low. Likewise, many local authorities appear to have a limited appreciation of hydrogen, its potential and applications.

There is, however, a growing level of interest and debate around the role of hydrogen in delivering net zero and creating a prosperous economy. For instance, in the ten days following the launch of the Hydrogen Strategy, it was the subject of more than 440 articles in leading UK publications, a jump of more than 350 per cent on the previous ten-day period. While most of these articles appeared on 17 August, the day of the strategy’s publication, there was a steady drumbeat of coverage and commentary afterwards, with around 20 articles about the strategy appearing per day.

With key policies still to be finalised, important audiences yet to be informed and convinced about hydrogen’s potential, and a media that is becoming more interested, the hydrogen industry has big challenges ahead – and a great deal to play for.

On Tuesday 7 September, the Hydrogen Taskforce, a coalition of the industry’s largest organisations, will launch a major campaign to show how hydrogen can play a leading role in accelerating the UK’s journey towards net zero. The Building a Hydrogen Society campaign will showcase the many benefits for local communities of applying hydrogen in running public transport, powering our industries.

By Neil Stockley, Director of the Energy team. Madano advises clients across the Energy sector, if you’re interested in learning more, please contact: [email protected]

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