The UK’s hydrogen sector could add more than £7 billion in annual GVA by 2030, according to Hydrogen UK – Hydrogen Economy.
The UK’s hydrogen sector could add more than £7bn in annual GVA by 2030, according to Hydrogen UK.
Hydrogen UK published an Economic Impact Assessment for the Hydrogen Sector to 2030, in which it explores the economic contribution of the hydrogen sector by the end of the decade. This considers the increased ambition for 10GW of low carbon hydrogen production by 2030.
As well as bringing £7bn in GVA, the study finds the hydrogen sector in the UK could support around 30,000 direct jobs by 2030. Hydrogen production accounts for a significant part of this, providing 8,500 jobs. Low carbon hydrogen production is estimated to contribute £2.9bn in GVA by 2030. The concentration of hydrogen related activity in industrial clusters and Scotland means that there will be a higher concentration of benefit from the hydrogen sector in regions that have historically received lower levels of investment.
However, action is needed to ensure these benefits can be realised. This means government and industry need to continue collaborating and making progress in deploying low carbon hydrogen projects. Hydrogen UK’s call is to move from initial policy design to delivery, ensuring momentum can be maintained.
Its recommendations include delivering on timelines and targets, with the benefits outlined dependent on the government meeting its low carbon hydrogen production target of 10GW by 2030. Keeping to this is key to investor confidence and keeping pace in the global race for hydrogen deployment.
Further calls include strategic decisions and support for hydrogen transport and storage infrastructure, with these critical to ensuring security of supply and lower cost hydrogen for end users. The government has implemented a revised timeline for opening the first allocations of both business models by the end of 2024. Hydrogen Uk says this is a welcome acceleration, but without a clear ptarget with a pathway and development expenditure support, there is a risk infrastructure will not be in place in time.
Further recommendations include closer alignment between government departments, with calls to investigate the viability of a central hydrogen funding organisation that can complement and coordinate the capital and R&D investment of existing funding organistions, and refining the Low Carbon Hydrogen Agreement to ensure risks within the Hydrogen Production Business Model can be adequately managed between government and industry. Here, it was noted that lowering the risk of projects would reduce financing costs and therefore the total subsidy cost for government. Ways to do this include unlocking blending, as a reserve offtaker, subject to safety assessments, while government should also continue assessing the need for greater sharing of CO2 cross-chain risks between industry and government.
Hydrogen UK also called for steps to be taken to ensure adequate demand side policy and trials across end uses, with it noted that there are a range of supporting government policies that would incentivise demand for low carbon hydrogen and increase understanding of different use cases. This includes through a Carbon Border Adjustment Mechanism as part of the UK ETS, continued exploration of a Hydrogen to power Business Model, and exploration of a range of measures across hydrogen transport such as through the Sustainable Aviation Fuel (SAF) Mandate and SAF Revenue Certainty Mechanism, as well as exploring the need for support for hydrogen refuelling stations and low carbon maritime fuels.
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The UK’s hydrogen sector could add more than £7 billion in annual GVA by 2030, according to Hydrogen UK – Hydrogen Economy. source
