The government is backing 11 major projects to produce green hydrogen, with £2 billion of funding over the next 15 years, resulting in more than 700 jobs across the UK.
Confirmed suppliers will receive a guaranteed price from the government for the clean energy they supply.
The government said this commitment represents the “largest number of commercial scale green hydrogen production projects announced at once anywhere in Europe, helping to place the country at the forefront of this emerging industry”.
Unlike blue hydrogen, which is created using natural gas and water – and produces a carbon byproduct, green hydrogen is made by using renewable energy to split water – helping provide cleaner fuel for energy intensive industries and transport.
In return for government support, successful projects will invest more than £400 million over the next three years, generating more than 700 jobs in local communities across the UK and delivering 125MW of new hydrogen for businesses including:
- Sofidel in South Wales, which will replace 50% of its current gas boiler consumption with hydrogen at its Port Talbot paper mill;
- InchDairnie Distillery in Scotland, which plans to run a boiler on 100% hydrogen for use in its distilling process; and
- PD Ports in Teesside, which will use hydrogen to replace diesel in its vehicle fleet, decarbonising port operations from 2026.
Secretary of State for Energy Security and Net Zero Claire Coutinho said: "Hydrogen presents a massive economic opportunity for the UK, unlocking over 12,000 jobs and up to £11 billion of investment by 2030."
Minister for Energy Efficiency and Green Finance Lord Callanan said: "This will be essential to achieving our net zero targets, and will benefit people across the UK with the job and investment opportunities that this funding will bring.
"And we’re not stopping there, with a new, second round of funding now available for producers to apply for so they can develop the next round of projects and build on this success."
'Future generations will value these steps'
Bart White, European head of energy structured finance at Santander Corporate & Investment Banking (Santander CIB), said: "We very much welcome the broad suite of announcements that will further catalyse the development of the UK’s hydrogen infrastructure and ecosystem. Future generations will value these steps to lay the foundations of this burgeoning market and a critical part of the solution towards net zero. We stand ready to explore financing new projects to play our part in the UK’s refreshed roadmap."
Greenpeace UK climate campaigner Georgia Whitaker said: “The government has finally realised there are deep flaws in using hydrogen for home heating; we now need them to fully embrace heat pumps as the only way forward. The push for hydrogen boilers was just a blatant attempt by the fossil fuel industry to keep us hooked on gas, which hydrogen is often made from.
“Green hydrogen – produced from renewable energy – is genuinely low carbon and will play a vital role in cutting emissions from industries, like steel and glass production, so the investment announced is extremely welcome.
“But heat pumps are the only sensible option for home heating. They’re already used extensively across Europe in all manner of homes and climates. So it’s no surprise that attempts to pay people to be guinea pigs in this weird hydrogen trial backfired. Now we just need the government to ramp up investment to make sure that the phase-out of polluting gas boilers happens as swiftly and fairly as possible.”
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