Driving the Growth for Low Carbon Hydrogen

In August 2021, the UK’s National Hydrogen Strategy was launched, alongside consultations on hydrogen business models, a Net Zero Hydrogen Fund, and low-carbon hydrogen standards.

The UK’s twin track approach prioritises both green and blue hydrogen and means the UK will have a large-scale supply of low-cost, low-carbon hydrogen available to the market sooner than many other countries.

In addition to generous R&D and patent tax reliefs and the 130% capital allowances super-deduction on plant and machinery equipment, your hydrogen investment case is supported by:

  • Revenue support: projects may apply for revenue support through the Hydrogen Business Model, which will focus initially on electrolytic and CCUS-enabled hydrogen production; the £240 million Net Zero Hydrogen Fund provides CAPEX/DEVEX support
  • Allocation rounds: there is a commitment to allocate support to projects in 2023 and 2024, with an annual allocation round
  • Regulatory environment: a UK Low Carbon Hydrogen Standard is being developed to provide a yardstick for public funding of projects and to help build market confidence
  • Existing assets: the UK has salt caverns and depleted oil and gas fields that are suitable for hydrogen storage as well as existing (and in some cases currently redundant) gas pipeline infrastructure that can be redeployed to transport hydrogen
  • Expertise: the UK’s deep resources of both renewables and oil and gas sector expertise mean that there is no shortage of the skills or creative thinking needed to make projects happen – the UK is consistently in the top ten countries globally for hydrogen technology patent rates
  • Pipeline of projects: over a dozen large-scale low carbon hydrogen projects are ongoing or under development, as well as two or three times as many smaller-scale ones. These cover a range of technologies and applications







Case Study

ITM Power: Driving the Growth of Low Carbon Hydrogen

Sheffield-based ITM Power manufactures integrated hydrogen energy solutions to enhance the utilisation of renewable energy that would otherwise be wasted. Its products generate hydrogen gas, based on PEM (proton exchange membrane) technology, which only uses electricity (renewable) and tap water to generate hydrogen.

Coupled with a renewable energy supply, this production method is capable of producing zero carbon hydrogen.