Recommendation 1

HM Government Deferred

Government has a leading role to play in the development of the low carbon hydrogen economy, providing the necessary market frameworks and funding support to deliver commercialisation of new technologies which will support meeting the UK’s net zero commitments. Government recognises the need to provide greater clarity, where possible, on the role of hydrogen in the future UK energy system. In addition to the Committee’s recommendation, there are similar proposals in the Net Zero Review (Jan 2022). The Net Zero Review calls for the government to develop an ambitious 10-year roadmap for the scaling up of hydrogen production and confirm the long-term funding envelope available for hydrogen. In 2023, the hydrogen economy is at an early stage of development. It would be challenging and risky to be overly prescriptive of hydrogen’s overall place in the UK’s decarbonisation plan, ahead of gaining insights from pathfinder projects throughout the 2020s. This is why the government is supporting early production, distribution, and use of low carbon hydrogen in the UK, and early anchor projects, which will be critical for generating more insights on the cost, benefits and impacts of using hydrogen as well as deployment of alternative decarbonisation options. Government set out key strategic decisions and milestones to 2030 and beyond in the Hydrogen Strategy Roadmap, which was published in the UK Hydrogen Strategy (Aug 2021). These include the decision on hydrogen blending into gas distribution networks by up to 20% by volume, anticipated in 2023; and strategic decisions on hydrogen for heat in 2026 which will be informed by the 100% hydrogen ‘Neighbourhood Trial’ planned for 2024 and ‘Village Trial’ planned for 2025. Trials for hydrogen and battery electric HGVs to establish their feasibility, deliverability, costs and benefits will also steer future policy direction. Government continues to assess the need for appropriate market intervention to support hydrogen to power generation which complements existing and announced support packages for the hydrogen supply chain, with an external study currently in progress. All of these decisions are expected to have important implications for the overall volume of hydrogen used in the UK energy system as well as the infrastructure and technology requirements out to 2050, and subsequently the nature and timing of further decisions in the future. In the UK Hydrogen Strategy, government set out its best current understanding of the range of hydrogen production and use in 2050. Analysis published in the UK Hydrogen Strategy indicated that low carbon hydrogen may increase from minimal use currently to comprising 20–35 per cent of the UK’s final energy consumption in 2050 - equivalent to 250–460 TWh and similar in scale to present electricity use. Recognising this longer-term uncertainty in 2050, government wants to ensure current and future businesses can take near term decisions on new research and development priorities. In the Net Zero Research and Innovation Framework (2021), government sets out key research and innovation (R&I) needs in hydrogen into the 2030s and beyond. Challenges identified include demonstrating low carbon hydrogen production methods as efficient, reliable and low-cost at increasing scales and demonstrating effective, low-cost methods of bulk hydrogen transportation and storage. Investment in discovery research, as well as development and scaling-up of current prototypes, should increase the chances that new technologies not yet ready for commercial deployment will be available in the future. This Framework lays the foundation for net zero R&I planning within government, which is intended to be followed shortly by a Net Zero Research & Innovation Delivery Plan. This will set out government’s current portfolio of R&I programmes which are helping support innovative businesses to develop the next generation of technologies needed to deliver net zero. ID 2 Hydrogen has several distinctive features as a low-carbon gaseous fuel and could contribute to the UK’s energy system, including through improving resilience and energy security. Whilst in some applications hydrogen is less efficient compared to alternative low-carbon technologies, the wider energy system benefits of deploying hydrogen must be acknowledged, and we welcome the Government’s whole systems approach in its Hydrogen Strategy. Consideration should be given to broader benefits, such as system resilience and national security, as well as price competitiveness as a fuel, in implementing the Hydrogen Strategy. Response System level thinking has been a key element of the government’s approach to developing hydrogen in the UK. Low carbon hydrogen is just one among the many decarbonisation technologies that government expects to contribute to meeting net zero. As such the Net Zero Strategy points to the integrated policy approach being taken to deliver emission reductions in line with the UK’s Carbon Budge