Government backs UK’s first commercial scale green hydrogen projects
Energy Security Secretary Claire Coutinho has announced backing for 11 major projects to produce green hydrogen while confirming suppliers will receive a guaranteed price from the government for the clean energy they produce.
This will deliver the UK’s first commercial scale green hydrogen production capability and represents the largest number of green hydrogen production projects announced at once anywhere in Europe.
Unlike blue hydrogen, which is formed using fossil fuels and capturing the carbon emissions, green hydrogen is made using renewable energy to split water – helping provide cleaner fuel for energy intensive industries and transport.
In return for government support, the successful projects will invest over £400 million in 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, who will replace 50% of their current gas boiler consumption with hydrogen at their Port Talbot paper mill
InchDairnie Distillery in Scotland, who plan to run a boiler on 100% hydrogen for use in their distilling process
PD Ports in Teesside, who will use hydrogen to replace diesel in their vehicle fleet, decarbonising port operations from 2026
Minister for Energy Efficiency and Green Finance Lord Callanan said, “This funding commitment represents a monumental step forward in helping producers to deliver a fuel of the future today. 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.
“The funding represents the most significant step in scaling up the UK’s hydrogen economy to date – speeding up progress towards the government’s ambition to deploy up to 10GW low carbon production capacity by 2030.”
Ministers have also opened a new second round of funding that companies can apply for to support their projects and published a production roadmap, which sets out the government’s plan for future allocation rounds in 2025 and 2026.
Sopna Sury, Chief Operating Officer Hydrogen RWE Generation said, “Announcements on the first two hydrogen allocation rounds mark a significant milestone in the development of the UK hydrogen economy. They represent a shift from policy development to project delivery, giving industry more clarity on the route to final investment decisions. These early projects are vital not only in driving the production of electrolytic hydrogen but also in signalling the need to build-out the transport and storage infrastructure for its wider distribution.”