'Set a target of heating one million homes with hydrogen by 2035', influential UK trade association tells ruling party
Several controversial policy recommendations among Hydrogen UK's 'Hydrogen Accelerators', launched at Conservative Party conference
The UK government — currently reeling from a cost-of-living crisis brought on by sky-high natural gas prices — has previously stated that it would not make any decisions about the use of hydrogen in domestic heating until 2026.
“Hydrogen UK has worked closely with policy makers and Ministers over the past year to develop world-leading hydrogen production business models to unlock hydrogen production at scale.”
But this is not enough to “maintain progress”, it adds.
“This document outlines the detailed steps that industry and Government must take together to accelerate hydrogen’s journey in the UK.”
The trade body’s “Hydrogen Accelerators” policy recommendations include:
- Setting a target for one million homes “to be heated by hydrogen by 2035”;
- A government commitment to mandate that all boilers sold from 2026 are “hydrogen-ready”, but would still burn methane in the meantime; and
- For ministers to commit to funding “hydrogen villages” — H2 heating demonstration projects in people’s homes “to maximise learnings for a future roll out”.
Hydrogen UK also calls upon the government to “confirm the role of hydrogen for domestic heat by end of 2026, subject to successful trials, and make clear in advance of this the nature of the decision framework and policy decisions that will be taken”.
Other controversial recommendations include:
- Funding “all eligible carbon capture projects... where compliance with future carbon budgets and trajectory to net zero is demonstrated”;
- To have no additionality requirements for any form of low-carbon hydrogen; and
- The government to support the blending of H2 into the gas grid — which would increase energy costs by about 33% in 2030, while only reducing emissions by roughly 7%.
The UK trade association is a vocal supporter of blue hydrogen, with proponents such as Equinor and ExxonMobil among its members.
Influence of gas lobby in UK Parliament
And its influence seems to be paying dividends. When the new Chancellor of the Exchequer, Kwasi Kwarteng, unveiled his extremely unpopular mini-budget last month, it included commitments to accelerate the delivery of two “vital” blue hydrogen projects in northern England: Hynet North West and the East Coast Cluster.
Kwarteng had been the first to speak at the launch event for Hydrogen UK (then known as the Hydrogen Taskforce) in Parliament in 2020 when he was energy secretary.
Questions have also been raised over an apparent lack of understanding about hydrogen among top-level British politicians, prompting several commentators to wonder who they were getting their advice from.
For instance, new energy secretary Jacob Rees-Mogg recently declared in Parliament: “I think hydrogen is ultimately the silver bullet. We create it from renewable sources, because we have the wind power when people are not drawing on the electricity system; we use it as an effective battery and it can then, with some adjustments, be piped through to people’s houses to heat them during the winter.”
According to the MCS Charitable Foundation, there are an estimated 120 paid hydrogen lobbyists operating in the UK parliament at present.
And they seem to be successful in getting their message across to British lawmakers.
The EUA is one of the 12 sponsors of the Hydrogen APPG, all of which have fossil-gas interests and strong reasons to support the use of hydrogen for domestic heating, leading to accusations about the influence of special interests in Parliament.
Campaigning for all possible uses of hydrogen
It is also arguing that the demand for hydrogen be stimulated through government subsidies, even though the UK currently produces around 700,000 tonnes of highly polluting grey hydrogen from unabated fossil gas each year — which would require somewhere in the region of 8-10GW of electrolysers if replaced by green hydrogen. The UK aims to install 5GW of electrolysers (and a further 5GW of blue hydrogen) by 2030.
The trade body argues in its Hydrogen Accelerators proposals that support for blending would help the production of clean hydrogen to “scale up”.
Another recommendation is to “provide short-term CAPEX [capital expenditure] subsidies to support the uptake of hydrogen cars, vans, buses, trucks and trains, stimulating demand for hydrogen in the transport sector”.
- Increased funding to enable 750MW of green H2 projects in each of the first two Hydrogen Business Model Electrolytic Allocation rounds (up from a maximum combined total of 1GW);
- Funding (as well as regulatory reforms) to allow hydrogen to play a role in capacity and dispatchable power markets;
- Support for “public procurement schemes for carbon-intensive products manufactured using low-carbon hydrogen”;
- Incentives for local authorities that “partner with UK hydrogen bus developers for their local transport network”;
- “Improved investment” in research and development for the use of hydrogen or its derivatives as shipping and aviation fuels.
Other proposals include:
- Amending the Renewable Transport Fuel Obligation, which requires producers to add biofuels to petrol and diesel, to include fuels derived from low-carbon hydrogen;
- Setting a target of 200 H2 refuelling stations across the UK by 2030;
- Requiring 1,000 of the 4,000 zero-emission buses that the government wants to see on the road by 2025 to be powered by hydrogen;
- Committing to a pilot Guarantee of Origin scheme to certify the source of each batch of clean hydrogen;
- Consulting on the requirements for future rules governing the international trading of H2 and its derivatives;
- Ensuring that “suitable transportation and storage business models are in place no later than 2025 to enable the development of hydrogen networks and storage infrastructure, with early support for low/no regrets and systemically important projects so construction can commence by the end of 2023”;
- Implementing measures to speed up consenting for major energy infrastructure;
- Committing as soon as possible to the development of a national 100% hydrogen pipeline network to link industrial clusters, in order to “enable conversion work to commence in 2026”;
- Amending current regulatory frameworks to allow the use of hydrogen in gas networks;
- Reducing VAT on hydrogen from 20% to 5% (in line with natural gas);
- Exploring the use of Carbon Contracts for Difference, or other measures, to encourage the use of hydrogen in industry; and
- Introducing carbon border adjustment mechanisms to ensure that imported goods made using cheaper grey hydrogen are taxed to prevent them from having a competitive advantage over domestic goods produced with more expensive low-carbon H2.