Business Models for Low Carbon Hydrogen Production: A Report for BEIS

Low carbon hydrogen could have a significant role to play in meeting the UK’s Net Zero target: the Committee on Climate Change (CCC) estimates that up to 270TWh of low carbon hydrogen could be needed in its ‘Further Ambition’ scenario. However, at present, there is no large-scale production of low carbon hydrogen in the UK, not least as it is more costly than most high carbon alternatives. For hydrogen to be the viable option envisaged by the CCC, projects may need to be deployed from the 2020s.
BEIS has commissioned Frontier Economics to develop business models to support low carbon hydrogen production. This report builds on the earlier Carbon Capture, Usage and Storage (CCUS) business models consultation2 and develops business models for BEIS to consider further. This report is a milestone in BEIS’ longer term process of developing hydrogen business models. It forms a part of BEIS’ wider research into a range of decarbonisation options across the economy.
Further analysis will be required before a final decision is made.