Hydrogen Strategy Update to the Market: December 2024

Low carbon hydrogen is essential to achieve the Government’s Clean Energy Superpower and Growth Missions. It will be a crucial enabler of a low carbon and renewables-based energy system and will help to deliver new clean energy industries which can support good jobs in our industrial heartlands and coastal communities. Hydrogen presents significant growth and economic opportunities across the UK, by enhancing our energy security, providing flexible, cleaner energy for our power system and helping to decarbonise vital UK industries. Hydrogen has a critical role in helping to achieve our Clean Energy Superpower Mission. It can provide flexible low carbon power generation, meaning we can use hydrogen to produce electricity during extended periods of low renewable output. Hydrogen can also provide interseasonal energy storage, through conversion of electricity into hydrogen and then back into electricity at times of need, using a combination of hydrogen production, storage, and hydrogen to power. To advance our Clean Energy and Growth Missions hydrogen also has a unique role in transitioning crucial UK industries away from oil and gas and towards a clean, homegrown source of fuel. Hydrogen can decarbonise hard-to-abate sectors like chemicals and heavy transport, complementing our wider electrification efforts and accelerating our progress to net zero. Using our strong domestic expertise and favourable geology, geography, and infrastructure, backing UK hydrogen can unlock significant economic opportunities and new, low carbon jobs of the future. Government has an ambitious range of policies in place to incentivise and support industry to invest in low carbon hydrogen. The recent Hydrogen Skills Workforce Assessment, an industry-led study undertaken by the Hydrogen Skills Alliance, estimated that the UK hydrogen economy could support 29,000 direct jobs and 64,500 indirect jobs by 2030. Since establishing in Summer 2024, this Government has already made significant progress in delivering the UK hydrogen economy. This includes confirming support for the 11 successful Hydrogen Allocation Round 1 projects, announcing up to £21.7 billion of available funding to launch the UK’s new carbon capture, utilisation and storage industry, and publishing our hydrogen to power consultation response with an aim to establish a new hydrogen to power business model. We have also launched three new bodies – the National Energy System Operator, Great British Energy, and the National Wealth Fund – which will help to deliver a world-class energy system, including for low carbon hydrogen. This December 2024 Hydrogen Strategy Update to the Market sets out the key milestones achieved by the Department for Energy Security and Net Zero in 2024 to deliver the hydrogen economy and an ambitious forward look at our next steps and upcoming opportunities. To achieve net zero and create a thriving and resilient energy landscape, we are already working at considerable pace to deliver a world-leading UK hydrogen sector.