Can the UK lead the way to a hydrogen-powered future?

Credit: Andriy Onufriyenko/ Getty images

Many governments are emphasising the need to pursue cleaner energy sources such as hydrogen – which does not produce CO² when burned, is light, and is easily storable – to mitigate carbon emissions.  

Just a few years ago in 2021, the UK was an established leader in the global hydrogen economy. The then-Conservative government’s Hydrogen Strategy was attractive for investors looking to produce and use low-carbon hydrogen. 

However, slow policymaking and implementation, and a failure to establish supporting mechanisms for hydrogen production, have seen the UK fall behind several of its rivals. And competitors. 

In February, the previous Conservative government made an announcement to invest a further £21m ($26.57m) into seven hydrogen projects across the country, as tries to ramp up production of the fuel to meet net zero targets. But, most will produce blue hydrogen, which is extracted from natural gas with carbon capture used to remove emissions.

Currently, hydrogen is largely used of as a feedstock for industrial processing, in the production of ammonia for fertilizers (around 50%), in refining (35%), and in food, electronics, glass and metal industries.

It has major advantages over other power sources: it can be used for mobility or heating applications just as a fossil energy source would be, but without emitting carbon and so offers considerable potential in terms of slowing climate change.

According to a spokesperson for Lhyfe, a large player in green and renewable hydrogen, green hydrogen is “not only a transitional power source, but also an effective tool to decarbonize some industrial sectors and heavy and intensive mobility.”

However, to do so, the “hydrogen has to be green hydrogen, produced locally, by electrolysis of water and from renewable electricity.”

The UK may have left it too long to establish a robust domestic supply for hydrogen, according to Energy Networks Association (ENA), the industry body funded by UK gas and electricity transmission and distribution licence holders, and Hydrogen UK, which calls itself the “voice of the hydrogen industry”. 

This could slow the deployment of further decarbonization efforts and lead to the UK missing out on the economic benefits of hydrogen.  

Recent research from the two organizations said the government should “urgently” put in place and legislate for investable hydrogen production, including pipelines and storage. The UK should also “look to make application processes easier to navigate in order to maintain the country’s advantage of a mature pipeline of projects, access to natural resources, and position as an international trading hub.” 

The UK should use the wider energy policy to achieve the goal of a “decarbonized grid delivering low-cost electricity, including to electrolysers producing green hydrogen, removing the burden from individual electrolytic producers.” 

The UK must also establish “a supply chain strategy now, including support for the future workforce, in order to maximise the significant economic benefits on offer from a robust domestic hydrogen supply chain.”  

Green hydrogen is produced using only water and renewable power, presenting an attractive option for reducing emissions in sectors where electrification is challenging. However, its production is still associated with high costs and logistical complexities, including the need for extensive infrastructure and safe transportation methods. 

BP states on its website that hydrogen “will play a vital role in a net zero energy system [and] if we can decarbonize its production, it becomes a great energy choice for industries that are hard to abate, such as, iron, steel and chemicals. For heavy transport – trucks, ships and aircraft – they need fuels that can manage the load while fitting into a small space.” 

The UK oil giant added that it is actively trying to grow its hydrogen business by “investing in between five and 10 projects around the world, and by 2030, we aim to produce 0.5-0.7 million tonnes of low-carbon hydrogen per year.”  

BP is also actively investing in both blue hydrogen (formed by splitting natural gas into hydrogen and CO², with the CO² captured and then stored) and green hydrogen, as it believes the “twin-track approach is the best way to help fulfil hydrogen’s potential.” 

Carbon capture and storage (CCS)-enabled hydrogen could be seen as useful stepping stone for towards a full-scale hydrogen economy, as it allows the near-term development of large-scale hydrogen projects that can make an immediate impact on emissions, usually at a lower cost than similar green hydrogen projects. 

Not all major oil companies have decided to expand their operations into the EV charging space, and some have even stated that they have no plans to get involved.  

The success of the green hydrogen economy in the UK is dependent on the sustained demand, efficient production, and distribution via suitable transport infrastructure. These require consistent funding while being able to overlook operational losses in the medium term. 

Two UK-based plants have been stalled in the last year. The Gigastack Lincolnshire Hydrogen Complex has been paused due to the need for further development and refinement to the supply chain. And, the Statkraft Trecwn Hydrogen Complex in Pembrokeshire, southern Wales, which planned to utilise solar and wind energy, has been postponed for at least a year. 

Despite the Statkraft plant being designed to run independently of the national grid, a small grid connection is needed to maintain equipment when renewable solar and wind energy is not available.  

The UK has made a significant investment in its hydrogen pipeline infrastructure via the development of the “hydrogen backbone”, capable of transporting blends of 100% hydrogen through up to 2000km of pipes, which will connect hydrogen production and storage sites with energy consumers across the UK. 

Project Union will look at repurposing existing network infrastructure alongside new pipelines to create a hydrogen pipeline network. It has a projected cost of $2.8bn (£2.2bn) and will consist of three main pipes crossing the country: Grangemouth to Southampton, Humberside to Frodsham and Thatcham to Llanelli. 

The UK currently has 15 active, electrolysis-based green hydrogen plants. The largest three are utilising wind, solar, biomass, and tidal renewable energy as their primary energy sources. And according to the GlobalData database they are producing a combined capacity of 0.371 Kilotons per annum. 

The number of electrolysis-based green hydrogen plants in the UK is set to increase by over 600% by 2030 with 95 new planned/announced plants. The completion of the backbone and additional pipeline infrastructure should provide sufficient transportation capacity for this increase to enable the UK to meet its capacity ambitions. 

Siemens Energy has called green hydrogen a “versatile energy carrier that can be applied to decarbonize a wide range of sectors, and can be used directly or in the form of its derivatives such as e-methanol, e-ammonia, or e-fuels to replace fossil fuels like coal or gas.” 

It added that only around 40% of global CO² emissions originate from power generation which can be decarbonized via electrification. The other 60% of CO² emissions originate from industry, mobility, buildings and others.  

“These can be decarbonized via sector coupling, using green hydrogen and its derivatives to make renewable energy available to those sectors. This is why the production of sustainable hydrogen is so important for the energy transition,” it added.  

In 2021, the UK’s ambition was to reach 5GW of hydrogen capacity by 2030. And in 2023, its Energy Security Strategy document acknowledged the critical role hydrogen will have in the nation’s energy mix – and increased the production target to 10GW by 2030. However, with hydrogen being distributed in less than 1% of gas networks, a lot of infrastructure still needs to be built.  

The research revealed the UK must consider funding timelines for projects and making the application processes easier, ensuring the entire project becomes more manageable. An increased focus on project deployments that deliver scale, rather than immediate monetary value, is essential for the UK to reach its 10GW capacity target.  

Blending hydrogen projects with new gas distribution networks is one possible way forward. 

The UK must ensure that developments in supporting the framework for hydrogen production is matched with support for storage and transportation infrastructure. A clear roadmap defining what critical infrastructure will be rolled out to support production targets is needed by the new Labour administration.  

The projects must also be ready to transition from the Existing System Operator (ESO) to Future System Operator (FSO) efficiently. Whilst the appropriate storage business models are being implemented, interim measures for hydrogen pipeline projects must be developed. 

And several major economies have laid out clear hydrogen roadmaps as the energy transition gains momentum. Oil titan Saudi Arabia announced in late 2024 that it poised to make a multibillion-dollar investment in green hydrogen, with plans to establish a new company dedicated to producing the low-carbon fuel. This initiative is part of the kingdom’s broader strategy to diversify away from oil and gas, while maintaining its status as a key global energy supplier. 

Low-carbon hydrogen will also attract consumers from diverse industries, according to a GlobalData poll from February 2024.  

The poll, based on 207 responses and carried out in late 2023, revealed that over 26% of respondents said that industries such as steel, cement, and paper production will be the major consumers of low-carbon hydrogen.  

These industries also have a significant carbon footprint. The use of hydrogen as a fuel in the critical processes of these industries will have a wide-ranging impact on global carbon emissions. 

The power sector is transitioning towards renewable energy sources, which are prone to periods of reduced intensity. In this case, hydrogen can act as a form of energy storage medium and can be used to supplement the deficit power. 

Hydrogen-powered fuel cells can be used to convert hydrogen energy into power. Hydrogen-based power generation can replace the role of traditional peaking power plants while drastically lowering carbon emissions. 

A representative from Finland’s Neste, which describes itself as one of the world's leading producer of sustainable fuels and renewable feedstock solutions, said “renewable hydrogen provides a clean, scalable, and versatile energy source for carbon-intensive processes such as steel, cement, and chemical production.

“The development of the hydrogen economy in Europe is promising – but quite slow. Investment decisions have been limited due to factors such as rising costs and unclear regulations” and while European goals are “ambitious the launch of industrial projects and implementation of legislation take time.”

The Lhyfe spokesperson added that we live “in an age where we are used to the instantaneous, yet it takes around 10 years to develop a new industrial sector.”

The continued: “In 2020, when the first hydrogen strategy was published, the world believed in a new magic solution, that the sector would be ready in two years and hydrogen would be available on a large scale straight away. This is physically impossible.”

The true potential for hydrogen as a transportation fuel lies in shipping, aviation, trucking, and heavy-lifting equipment, added the GlobalData analysis. Guidelines by the International Maritime Organization (IMO) to decarbonize the shipping sector could work in favour of fuels such as hydrogen.

About one-sixth of the respondents indicated that the downstream sectors of refining, chemicals, and fertilisers could together be the major consumer of low-carbon hydrogen.