You can read below the REA’s high-level key asks to Government for the UK Hydrogen Strategy. These asks have been submitted to BEIS.

  • A clear strategy and policy framework is urgently required to support investment and mass deployment of low-carbon hydrogen, underpinned by a transparent and robust methodology for carbon accounting of different hydrogen production pathways.
  • Forms of hydrogen that can deliver truly zero or negative GHG emissions should be the long-term goal for the UK.

Specifically, the REA calls for the following:

  • The Government should release an ambitious strategy that signals its long-term commitment to low-carbon hydrogen deployment, attract investment in these sectors and position the UK as a world leading country on the development low-carbon hydrogen supply chains.
  • Forms of hydrogen and hydrogen pathways that can deliver truly zero or negative GHG emissions should be the long-term goal for the UK. Blue hydrogen should be supported where an interim bridge to green supplies and all carbon is fully accounted and stored.
  • A transparent and robust methodology for carbon accounting of the hydrogen production pathways and supply chains must be adopted to ensure the carbon can be fully monitored, tracked and accounted for.
  • It is vital that any policy or financial support adopted by Government to support hydrogen is technology neutral ie it must not be centred only on blue and electrolytic hydrogen but other forms of low-carbon hydrogen, such as biohydrogen from thermal gasification and hydrogen from non-biogenic wastes that cannot be recycled, must be clearly recognised within the Strategy and supported by Government.
  • To underpin investment in these forms of hydrogen the strategy should set a clear policy framework to support delivery, coupled with dedicated low-carbon hydrogen delivery targets by 2030. In our view the current target set out in the Energy White Paper of 5 GW production capacity by 2030 doesn’t go far enough and should be more ambitious. Also, sub-targets should be set for specific applications e.g. refineries, industrial applications / processes, transport applications and the gas grid, to drive investment in these market segments.
  • We strongly support the introduction of a specific revenue scheme (e.g. a variable premium payment scheme) for low-carbon hydrogen supply/production, but this needs to be combined with a ‘pot’ of policy measures and funding – or amendment to existing policy mechanisms – to support different applications in different sectors/markets as different markets or applications may require different support. These include but are not limited to:
    • Amending the Green Gas Support Scheme to allow hydrogen injection into the gas grid
    • Amending the RTFO to support/unlock the potential of low-carbon hydrogen use in transport applications
    • Waiving VAT from low-carbon hydrogen for transport applications until 2030 or charging it at the lower rate of 5%
  • Collaboration and a joined-up approach is needed between BEIS and DfT in the approach adopted on what qualifies as low-carbon hydrogen (ie the low carbon hydrogen standards), hydrogen eligibility criteria and to ensure we can have the smoothest interaction between any revenue scheme introduced by BEIS (e.g. variable premium/CfD type mechanism) and the RTFO or any other market based mechanisms.
  • For industry where low-carbon hydrogen is the only option – or one of the few options – available to decarbonise, it may be necessary to introduce a mandate to drive investment over the long term. E.g. setting a target of 25% decarbonisation of refineries by 2030 could kick start the market straight away.
  • We support the principle of additionality for the electricity used for producing low-carbon-hydrogen, but it is crucial that the associated rules are not rigid, but pragmatic, workable and flexible, to allow companies to develop in the early years and to use the most optimal and efficient configurations. Additionality rules should not hamper deployment of low-carbon hydrogen.
  • In order that low-carbon hydrogen producers can access cheaper electricity from the grid, they should be exempt from ’green levies’ on electricity bills and from use of system fees – in a similar way to how energy storage assets have been exempt.
  • Hydrogen should be enabled to deliver long duration energy storage projects as part of appropriate support for that part of the sector, namely a Cap and Floor or Regulated Asset Base regime.
  • Hydrogen can also play a key part in the development of Sustainable Aviation Fuel (SAF) – providing this is sourced from green sources. There is the potential for UK production, which will require clear and consistent government policy to ensure these investments are made in the UK rather than elsewhere. Consultations on a ‘mandate’ for use of these fuels and a wider Sustainable Aviation Strategy are expected in July. These need to be published on time and move swiftly to implementation.