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Between hope and hype: a hydrogen vision for the UK - E3G report

29 March 2021

Ahead of BEIS’s forthcoming Hydrogen Strategy, E3G’s new report sets out policy recommendations in order to add most value for climate, jobs, and levelling up.

The first chapter inspects key considerations that should inform the strategy’s development. The paper then inspects how a hydrogen strategy can support an inclusive and resilient economic recovery from the pandemic; before considering what a hydrogen strategy for climate leadership could look like. Finally, it considers how a hydrogen strategy can deliver for all – ensuring the best outcomes for households and workers, including the most vulnerable.

Key recommendations include:

The UK should focus on green hydrogen to show climate leadership and make gains in the international innovation race. Blue hydrogen is not zero emissions and should not be classed as ‘low carbon’. We discourage the UK from taking a ‘twin track’ approach of pursuing both green and blue hydrogen. The UK can show leadership through introducing targets and standards which support green hydrogen and ensuring that public funding is only used to develop zero emissions fuel and technologies.

Scaling up green hydrogen requires parallel rapid growth in renewable energy – particularly offshore wind – as well as electrification, efficiency and circular economy. These measures have strong social, economic and environmental co-benefits, and will be central pillars of any decarbonisation strategy, regardless of the role of hydrogen. 

The UK should set out a vision identifying where green hydrogen production and use is likely to add most value, ensuring a cost-effective use of public funding. A system-wide stock-take can help establish where hydrogen adds the most value for jobs, productivity growth and climate – focused on sectors that do not have alternative decarbonisation options, and regions which have access to abundant renewable energy sources. This is mainly applicable to high temperature heat in industry, shipping and aviation, and long-duration storage in the power sector.  

Governance mechanisms are needed for risk-managing delivery and avoiding a ‘lock in’ of fossil fuel derived energy sources. These should ensure a switch away from fossil-based fuels, and could include clear timelines and targets, transparency and accountability mechanisms, and regulations and standards which support a phase-out.

Hydrogen pipelines should be built around secure hydrogen demand and supply; not around the question of how existing gas assets can best be kept functioning. The future hydrogen grid is likely to be significantly different than today's gas grid, clustered around industrial end users rather than nationwide. As such, nationwide ‘blending’ of fossil gas and hydrogen is not appropriate.  

For the decarbonisation of heat in buildings, the UK should focus on making rapid gains on energy efficiency, heat pumps and renewable heat networks. A growing body of evidence suggests that green hydrogen for heating is likely to only play a small role in industrial clusters where there is a surplus. Waiting for long-term progress on hydrogen must not act as a blocker to action that can be taken today. 

A large focus on jobs, skills and supply chains is required to ensure a just transition and support the “levelling up” agenda to reduce regional inequalities. The UK must focus on supporting new green skills and jobs to address transition risks as the country phases out fossil gas energy and infrastructure, engaging closely with workers and unions.

The Government must promote evidence-based and society-wide decision making. This requires including all sectors of society in decision-making and advisory bodies such as the Hydrogen Advisory Council, and rooting choices in independent science. The Government should engage the most vulnerable workers and households to ensure the approach works for everyone, as well as ensuring a central role for Local Authorities and city councils.

Read the full report here Between hope and hype: a hydrogen vision for the UK.

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