Hydrogen UK Supply Chain Strategic Assessment

Hydrogen offers the UK a unique opportunity to deliver on our Net Zero ambitions, enabling deep decarbonisation of the parts of the energy system that are challenging to electrify, balancing the energy system by providing large scale long duration energy storage and reducing pressure on electricity infrastructure. The UK Government, in recognition of the centrality of hydrogen to the future energy system, has set a 10GW hydrogen production ambition to be achieved by 2030. This ambition and its supporting policies such as the Hydrogen Business Model, the Low Carbon Hydrogen Standard and the Hydrogen Transport and Storage Business Models will unlock private sector investment and kick-start the UK’s hydrogen activity. Encouragingly the UK has a positive track record of deploying low carbon technologies. The  combination of the UK’s world leading policies and incentive schemes, alongside a vibrant  Research, Development and Innovation (RD&I)  and engineering environment, has enabled rapid  deployment of technologies such as offshore wind  and electric vehicles. Yet despite being world leaders  in deployment, early opportunities for regional  supply chain growth and job creation were not fully  realised and taken advantage of from inception. The  hydrogen sector is therefore at a tipping point. To  capitalise on the economic opportunity hydrogen  offers, the UK must learn from prior technology  deployments and build a strong domestic hydrogen  supply chain in parallel to championing deployment.
Hydrogen is unique amongst low carbon  technologies. It represents a significant economic  opportunity, with future hydrogen markets estimated  by the Hydrogen Innovation Initiative to be worth  $8tn and hydrogen technology markets estimated to reach $1tn by 20501 but crucially it is also still a nascent market. Unlike many other low carbon technologies where supply chains are already well established, hydrogen supply chains are embryonic, meaning that the UK has an opportunity to anchor these supply chains here and establish itself as a global leader.
The UK is well placed to capitalise on this opportunity, with favourable geography and geology  that enables us to produce and store hydrogen cost effectively, coupled with a strong pipeline of hydrogen projects, a stable policy environment that is attractive to investors and a wealth of transferable skills and expertise from the oil and gas industry.
We must ensure that alongside our focus on deployment, we are also investing in technology and supply chains. Not only will this deliver exponential economic benefits from the projects supported by Government but it will also enable us to tackle increasing global supply chain constraints. Hydrogen UK estimated in its Economic Impact Assessment that hydrogen could deliver 30,000 jobs annually and £7bn of GVA by 2030
It is important to be targeted and strategic in our investment and activities and recognise that hydrogen represents a wide range of technologies, and the UK should not expect to lead in every area. Hydrogen UK, with the support of the Hydrogen Delivery Council, has undertaken analysis of the hydrogen value chain, building on UK strengths and identifying the high value items that can deliver significant impact and benefit to the UK. We have also conducted widespread engagement with project developers to identify the barriers to utilising UK technology in projects, and with technology developers to identify the challenges and barriers to investing and siting development and manufacturing in the UK.
The report can be found on Hydrogen UK's website.