Government recommendation 4:

Create a plan for integrated energy infrastructure to deliver an optimal future energy system incorporating gas, electricity and hydrogen (and CO₂), enabling balancing of intermittent renewable power generation. Capturing the significant wider system efficiency benefits has the potential to deliver up to £38bn cost savings1. Industry and government should work more closely together to develop this plan.

Government recommendation 5:

Provide an integrated plan for the implementation of the Hydrogen Strategy to 2030, building on the existing roadmap. Collaboration and shared accountability between industry and government will be fostered by a visible, joined-up plan for hydrogen across government departments, coordinated by DESNZ.

Industry recommendation 2:

Industry and trade associations should work together to evaluate the scale of the economic opportunity of hydrogen, to ensure this is not underestimated. The Government would benefit from additional data to provide the full picture of how many jobs the hydrogen economy could create.

Industry recommendation 3:

Industry should work closely with government to identify UK strengths, make voluntary commitments to deliver UK content and to formulate a wider supply chain strategy that builds on UK strengths, as has been done for aviation.

The UK is uniquely placed to be a global leader in Carbon Capture Usage and Storage (CCUS), which will play a critical role in the transition to net zero. We must act quickly to foster certainty and attract the investment that we need.

Net zero is a driver of economic growth: it has already delivered growth for the UK and will continue to do so. There are already around 430,000 jobs in low carbon businesses and their supply chains across the country with turnover estimated at £41.2 billion in 2020. Government analysis suggests that nearly 68,000 green jobs have been created or supported since November 2020.

The Government should continually assess the existing business rates incentives to ensure there are no further inadvertent disincentives for businesses to invest in net zero technologies. For example, up to 50% of business investment is potentially subject to business rates. HMT should consider the balance between increasing business rates and the use of business rates in supporting business growth and decarbonisation.

The Government estimates that the policies underpinning the Net Zero Strategy and the British Energy Security Strategy could support 480,000 green jobs by 2030, and the Energy Innovation Needs Assessment published by BEIS found that business opportunities identified from decarbonisation could support approximately 500,000 jobs in the UK by 2050.

“According to our research, the global green economy has recorded a compound annual growth rate of approximately 14% over the last 12 years, increasing its market capitalisation from $2 trillion in 2009 to more than $7 trillion in 2021. Despite the current geopolitical and economic environment, investors are increasingly looking to allocate capital more sustainably. In a recent survey, we found that 86% of asset owners globally are implementing sustainable investment in their strategies – this is up from 76% in 2021.” – London Stock Exchange

“Higher energy prices are one of the main challenges and obstacles to the industrial decarbonisation…Security of energy supply is an absolute condition to decarbonise. Without security of energy supply, energy intensive industries are unlikely to have to confidence to make the investment necessary to reach the net zero target.”

“[The] implementation of ambitious circular economy scenarios could generate a ‘win-winwin’ scenario where GDP increases, CO₂ emissions decrease, and jobs are created […] Government could help to create over 450,000 jobs in the circular economy by 2035 in reuse, repair, and manufacturing across the UK” – Green Alliance

• Through the Review of Electricity Market Arrangements, develop a strategy as soon as possible on market design for the medium- to long-term for a fully decarbonised, resilient electricity system in the 2030s and onwards. -DESNZ Recommendation
• Several countries have announced their intentions to export green hydrogen. This offers the UK an opportunity to diversify its energy imports.
• While unlikely to be cost competitive in the near-term, green hydrogen imports are expected to be cost competitive with domestic green hydrogen production by 2050.
• While there are a range of hydrogen storage options, salt caverns are the main solution being explored in the UK.
• Finalise funding mechanisms and allocate funding to support the development of 10 GW of low carbon hydrogen production by 2030. -DESNZ Recommendation
• Fast track the development of new business models for hydrogen transportation and storage infrastructure, with a view to keeping options open for larger scale hydrogen use by 2030. -DESNZ Recommendation
• A key aim of the Energy Security Strategy is to reduce the UK’s dependence on imported fossil fuels.

“Carbon capture & storage (CCS) is a necessity, not an option, for reaching net-zero emissions”. – Climate change committee, UK

“Without CCS, our energy and climate goals will become virtually impossible to reach”. – Fatih Birol, Executive Director of International Energy Agency

“We have to reduce emissions urgently and take action to tackle the carbon already in the atmosphere. Putting a value on carbon thus making carbon capture solutions more economical is therefore absolutely critical.” – The Prince of Wales

“That’s why today I’m so proud to launch our Green Prosperity Plan. A plan that will turn the UK into a green growth superpower. And driving the plan forward is a goal that will put us ahead of any major economy in the world: 100 percent clean power by 2030. A huge national effort. An effort that will: double Britain’s onshore wind capacity, treble solar power, quadruple offshore wind, invest in tidal, hydrogen, nuclear. … Let’s get clean hydrogen energy in South Yorkshire, in the East of England, across the river in the Wirral”

“Yes, I believe that the North West, in addition to the rest of the country, will be a world leader in hydrogen technology. The HyNet project is an excellent example. We have already put £45 million into supporting the HyNet project, kickstarting our hydrogen capture and storage”

“The HyNet project gives the North West and North Wales an unprecedented opportunity”

“HyNet North West is essential for securing the future of our region”

“The ability of HyNet to transform the North West, safeguarding jobs, creating new ones and positioning the region at the forefront of green innovation is hugely exciting”

“The list below sets out infrastructure projects that will be accelerated as fast as possible, aiming to get the vast majority starting construction by the end of 2023. These projects may benefit from acceleration through planning reform, regulatory reform, improved processes or other options to speed up their development and construction, including through development consent processes.

HyNet Hydrogen Pipeline; Inovyn Hydrogen Storage (Hynet Cluster, NW); East Coast Cluster Hydrogen Pipeline; Aldbrough Hydrogen Storage (East Coast Cluster, Humber); Hydrogen electrolyser capacity Deployment; HyNet Cluster – CCUS cluster in the North West; East Coast Cluster – CCUS cluster in Teeside and Humber”

“Hydrogen is a real opportunity for the UK, with a key role to play in the resilient zero carbon energy system we need to meet the challenges of the changing climate and of global politics. The UK missed the boat on battery and wind technology, we can’t afford to miss the boat on hydrogen”.

“We should aim to have a diversity of energy sources – not least so as not to have to rely on unfriendly powers. Hydrogen is an important part of the picture, and an area where the UK begins with world-beating advantages”.

“Embracing hydrogen is critical to achieving the UK’s net zero ambitions. From supporting the decarbonisation of energy intensive industries to reducing public transport emissions there are myriad applications for hydrogen that won’t just help us meet our climate goals but also protect and sustain high skilled jobs.”

“Hydrogen needs to be part of the energy mix to enable the transition to Net Zero. I am pleased to be involved in a thorough assessment of the role of hydrogen, including considering the needs and ambitions of communities and places, as we know there won’t be one solution that works everywhere. We need to ensure that the choices we make now don’t create problems for future generations whilst enabling the economic renewal offered by moving faster towards Net Zero.”