Environmental Audit Committee voices fears the UK risks missing out on fast-emerging green hydrogen opportunity
The chairman of the Environmental Audit Committee (EAC) has warned that the potential for hydrogen to play a key role in the UK's net zero transition could be squandered by the lack of any clear strategy from government, in a letter delivered today to Business Secretary Alok Sharma.
The EAC's concern stems from evidence gathered by the body in its recent inquiry, Technological Innovation and Climate Change: Hydrogen. During evidence sessions and in written correspondence, the EAC heard the UK has the expertise and technical capability to scale up the development of its nascent low-carbon hydrogen industry, but is already lagging behind other nations such as Australia, Japan, and Canada, all of which have ambitious hydrogen strategies in place, the letter warns.
It also flags that the UK is slipping behind the EU, which adopted an ambitious Hydrogen Strategy in July, containing goals to increase the bloc's renewable hydrogen capacity from 1GW today to 6GW by 2024 and 40GW by 2030. Germany has also made green hydrogen development one of the centrepieces of its €40bn green stimulus package.
"The Committee heard time and again during evidence that the UK's lack of a Hydrogen Strategy by Government is holding back efforts to make scaling up hydrogen production a reality," said EAC chair Philip Dunne.
"The upcoming National Infrastructure Strategy due in the Autumn could be an excellent opportunity for the government to bring forward a Hydrogen Strategy to underpin its commitment to a Net Zero Britain."
In particular, Dunne's letter notes the role hydrogen could play in the UK in the context of hard-to-decarbonise sectors such as industrial processes and transport, including heavy goods vehicles and shipping.
"Hydrogen can play a large role in high carbon, energy-intensive industries where existing alternatives may not present a viable economic or cost-effective option to decarbonise," the letter states. "These could involve blending hydrogen with natural gas or converting industrial sites or power plants to run on 100 per cent hydrogen."
A clear strategy could foster the development of hydrogen clusters around the country, it adds, supporting jobs and local economies while helping heavy industries such as chemicals and steel navigate a transition towards zero emissions.
The letter also highlights the challenges involved in decarbonising the production of hydrogen, 95 per cent of which is currently derived from fossil fuel feedstocks, making the development of carbon capture and storage (CCS) technology critical to the UK's hopes of meeting its net zero emissions goals.
"The March Budget committed "at least £800m" to "establish CCS in at least two UK sites, one by the mid-2020s, a second by 2030"," the letter notes. "However last year, our colleagues on the BEIS Committee identified five potential CCS clusters and said the government should 'target the development of the first CCS projects in at least three clusters by 2025'."
The EAC also argues that the potential for the UK to harness its offshore wind sector to develop renewable hydrogen remains under-explored, urging the government "look at the opportunity for renewable hydrogen and encourage development through a multi-year roadmap and by demonstration projects."
The EAC is not the first body to raise concerns over the sluggish development of hydrogen in the UK. In 2018, the Committee Climate Change said the UK had been too slow to move in the sector and that its hydrogen policy needed significant "ramping up". Two years later, in its 2020 progress report to parliament, it called on the government to set out a "cross-cutting vision and strategy for a hydrogen economy".
A number of businesses have similarly called on the government to step up support for the fledgling hydrogen sector in recent months.Most notably, JCB heir Jo Bamford has touted plans to shift much of the UK bus fleet to hydrogen through his Wrightbus and Ryse Hydrogen ventures.
Various reports have suggested the government is keen to include hydrogen in its promised 'green recovery' plans and Prime Minister Boris Johnson has hinted that Wrightbus' proposals are under consideration. However, Ministers are yet to come forward with significant new funding and a strategy comparable to other leading nations.
The Committee has requested a response from the Business Secretary by 2 September.
A BEIS spokesperson said: "Hydrogen has the potential to be a vital part of the UK's future net zero energy mix, and we are already investing up to £120m into exploring it as an alternative to fossil fuels in heating, transport and industry.
"Last month saw the first meeting of the Hydrogen Advisory Council which sees government working with industry on actions to scale up hydrogen production. We will set out our strategic approach in due course."
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