Tens of thousands of jobs, billions of pounds in investment and new export opportunities will be unlocked through government plans to create a thriving low carbon hydrogen sector in the UK over the next decade and beyond, the Business and Energy Secretary Kwasi Kwarteng has set out today

The UK’s first-ever Hydrogen Strategy drives forward the commitments laid out in the Prime Minister’s ambitious 10 Point Plan for a green industrial revolution by setting the foundation for how the UK government will work with industry to meet its ambition for 5GW of low carbon hydrogen production capacity by 2030 – which could replace natural gas in powering around 3 million UK homes each year as well as powering transport and businesses, particularly heavy industry.

A booming, UK-wide hydrogen economy could be worth £900 million and create over 9,000 high-quality jobs by 2030, potentially rising to 100,000 jobs and worth up to £13 billion by 2050. By 2030, hydrogen could play an important role in decarbonising polluting, energy-intensive industries like chemicals, oil refineries, power and heavy transport like shipping, HGV lorries and trains, by helping these sectors move away from fossil fuels. Low-carbon hydrogen provides opportunities for UK companies and workers across our industrial heartlands.

With government analysis suggesting that 20-35% of the UK’s energy consumption by 2050 could be hydrogen-based, this new energy source could be critical to meet our targets of net zero emissions by 2050 and cutting emissions by 78% by 2035 – a view shared by the UK’s independent Climate Change Committee. In the UK, a low-carbon hydrogen economy could deliver emissions savings equivalent to the carbon captured by 700 million trees by 2032 and is a key pillar of capitalising on cleaner energy sources as the UK moves away from fossil fuels.

The government has said that hydrogen will play a “critical” role in meeting Boris Johnson’s pledge to hit net-zero emissions by 2050.

However, household gas bills are expected to rise under the scheme with commentators saying that there was a risk that bill payers could be locked into paying for the development of “pointless” technology.

Matthew Fell, CBI Chief Policy Director, said:

“With hydrogen key to unlocking decarbonisation across carbon-intensive sectors, as well as stimulating high levels of skilled green jobs, the Government’s Hydrogen Strategy is a key milestone in the delivery of the UK’s 10 Point Plan.   

“As a leader in high-skilled manufacturing, and with an extensive legacy in energy production, the UK stands perfectly positioned to capitalise on the opportunities provided by hydrogen. Confirmation of both a business model consultation and the launch of an action plan for developing the hydrogen sector are important steps that will alleviate uncertainty in the market and provide the confidence boost private investors are looking for.

“However, to truly capitalise on those large-scale economic opportunities, and unlock the private sector finance needed, firms will now be looking for the Government to provide detailed policies and standards for hydrogen production and application.

“With its cross-economy applications in the transition to net-zero, firms will be looking to the Government to make ambitious commitments on hydrogen testing and demonstration projects in the upcoming Comprehensive Spending Review – as well as clearly identifying its role in decarbonising the UK’s heat system through the Heat and Buildings Strategy.

“As the countdown to COP 26 continues, hydrogen is an area where the UK can lead by example on the global stage, showcasing the value of strong partnerships between government and the private sector on the road to reducing emissions.”

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