Hydrogen Strategy Update to the Market: December 2022

The Government is committed to developing the UK’s low carbon hydrogen economy: hydrogen is considered critical to delivering energy security and our decarbonisation targets, and presents a significant growth opportunity. It can play a pivotal role in our transition to a future based on renewable and nuclear energy, while ensuring that natural gas used during this transition is from reliable sources including our own North Sea production, and can provide clean energy for use in industry, power, transport, and potentially home heating. In the UK Hydrogen Strategy we included the commitment to regularly summarise our policy development to keep industry apprised. Since publication of the Hydrogen Strategy we have doubled our low carbon hydrogen production capacity ambition to up to 10GW by 2030 (with at least half from electrolytic hydrogen) in the British Energy Security Strategy, provided greater clarity to investors through the Hydrogen Investment Package, and made substantial policy and funding strides across the hydrogen value chain. We summarised these ambitions, commitments and actions in the first Hydrogen Strategy update to the market in July 2022. This was published alongside other key elements of our policy support, which also included the launch of the first Electrolytic Hydrogen Allocation Round – offering joint Net Zero Hydrogen Fund (NZHF) and Hydrogen Production Business Model (HPBM) support – and our Hydrogen Sector Development Action Plan, and the appointment of a UK Hydrogen Champion. Hydrogen is closely integrated into Government’s wider policy development on energy security and the energy transition both domestically and internationally, with hydrogen policy previously announced through the Net Zero Strategy and the Breakthrough Agenda at COP26. This December 2022 Hydrogen Strategy update to the market summarises the extensive activity across Government since July to develop new hydrogen policy at pace and to design and deliver funding support. This includes announcements on shortlisted hydrogen projects in the Cluster Sequencing Process, the launch of a consultation on hydrogen transport and storage (T&S) infrastructure, the publication of the HPBM Heads of Terms, and an update on the ongoing first Electrolytic Hydrogen Allocation Round. The hydrogen policy development presented here underlines the Government’s approach to promote every aspect of the UK hydrogen economy in collaboration with industry, investors and international partners to create a strong, globally competitive UK hydrogen sector.