UK bets on green hydrogen with new funding round

Business Secretary Kwasi Kwarteng met on Thursday with industry leaders to reaffirm the government's commitment to unlocking £9bn of investment towards kickstarting a major roll-out of new clean super-fuel and transforming the UK into a hydrogen-based economy.  

As part of this hydrogen push, the UK government launched the world’s first national clean-hydrogen subsidy scheme, which will help finance an initial 1GW of green hydrogen projects by 2025 – enough hydrogen to fuel up to 45,000 buses per year.

The funding for electrolytic (‘green’) hydrogen projects − a method which uses an electrical current to separate hydrogen from oxygen in water − will come from both the Net Zero Hydrogen Fund and the Hydrogen Business Model. 

"The UK’s hydrogen sector is open for business. With the right investment, we can unlock the enormous potential of hydrogen by reindustrialising our economy and ending our dependency on expensive fossil fuels," Kwarteng said. 

Kwarteng will also announce the appointment of Jane Toogood as the UK’s first Hydrogen Champion, which will focus on bridging the gap between business and the government in order to make the UK a "leader in green hydrogen", attract "billions of pounds" in inward investment and support 12,000 jobs across the country.

"The government has ambitious plans for the UK to ramp up hydrogen technology," Toogood said.

"Hydrogen deployment as a clean energy source is one of the key solutions to help the UK reach its net-zero targets and I strongly believe there is an opportunity to accelerate this, working collaboratively across industry and government to land projects and infrastructure on a timeline that serves stakeholder and customers’ needs."

RenewableUK has welcomed the news of the funding, hailing it as a "landmark announcement" that will "kickstart the private investment we need to build up a whole new industry in the years ahead" and help the country decarbonise sectors such as transport and energy-intensive industries. 

Green hydrogen has been hailed as one of the solutions that will enable the UK to reach net-zero. 

As gas prices continue to soar due to the war in Ukraine, green hydrogen is a highly efficient alternative energy source with minimal carbon emissions which could be used to power heavy goods vehicles or public transport.

In recent months, the government has opened applications for the £240m Net Zero Hydrogen Fund, published the Hydrogen Investor Roadmap, and set out details for the Hydrogen Business Model and Low Carbon Hydrogen Standard.