Key climate policies
Energy Act (2023)
Powering Up Britain
The CCUS Vision
UK Emissions Trading Scheme (UK ETS)
To meet these ambitions, the UK has committed to supporting both electrolytic and CCUS-enabled hydrogen production.
By mid-2020s, we could start seeing larger (100MW) electrolytic hydrogen projects and the first CCUS-enabled hydrogen production facilities based in industrial clusters. By the end of the decade, there could be multiple large CCUS-enabled (500MW+) production facilities across the UK.
Currently, over a dozen large-scale hydrogen projects are ongoing or pending (e.g. Acorn, Gigastack, H21).
By setting up a hydrogen certification scheme by 2025, a new Low Carbon Hydrogen Standard is being established. This will support the UK in playing an active role in the international hydrogen market.
The Net Zero Hydrogen Fund (NZHF)
The Net Zero Hydrogen Fund (NZHF) which is worth up to £240 million, will fund the development and deployment of new low-carbon hydrogen production to de-risk investment and reduce lifetime costs. NZHF’s grant allocation is split into the following 4 strands:
- Strand 1: Development expenditure (DEVEX) for front-end engineering design (FEED) and post-FEED activities, aims to build the pipeline of hydrogen production projects to measurably move these closer to deployment. The application window for strand 1 has now closed.
- Strand 2: Capital expenditure (CAPEX) support for hydrogen production projects that do not require revenue support through the Hydrogen Business Model (HBM). Applicants for Strand 2 must demonstrate how they will develop a credible project that will contribute to the at-scale production of low-carbon hydrogen by 2025. Strand 2 closes on 13 July 2022.
- Strand 3: CAPEX for non-CCUS enabled projects which require revenue support through the hydrogen business model.
- Strand 4: CAPEX for CCUS-enabled projects which require revenue support through the hydrogen business model. Strand 4 NZHF’s Expression of Interest process will launch following the announcement of the Phase-2 shortlisted projects, followed by a Strand 4 application process in early 2023.
Carbon Border Adjustment Mechanism
Carbon Contracts for Difference
Spring Budget 2023
In the 2023 Spring Budget the UK Government allocated £20bn over the next 20 years to support the development of carbon capture and storage, specifically support the HyNet, Acorn, East Coast Cluster and Viking storage projects and emitter projects connecting to these.
Further information: Spring Budget 2023