There is a belief in the hydrogen sector that the UK still happens to hold a major opportunity when it comes to clean hydrogen, however, much of the policy uncertainty risk along with unclear investment signals could as well cause projects along with capital to move elsewhere. That’s something that many people may think is too early to suggest however, with the way things are moving, it looks like the shift in projects and capital can turn out to be a reality.
The CEO of Hydrogen UK, Clare Jackson, at the annual conference went on to warn that government delays along with policy uncertainty risk are indeed undermining the clean hydrogen sector of the UK and that too at a crucial moment for the industry. As we are aware, hydrogen, of all the other sectors, is indeed witnessing rapid changes by the day. And it is not only a particular region that’s seeing this transition, but across geographies there is a hint of development or a small step toward adoption that’s being taken.
It has been a rollercoaster year for hydrogen
According to Jackson, 2025 is indeed a rollercoaster year for the hydrogen industry. In spite of the political uncertainty along with project setbacks, she went on to argue that the strategic case when it comes to hydrogen has actually gone on to become more robust, especially when it comes to sectors that apparently are pretty challenging to electrify.
It is well to be noted that hydrogen is viewed as a major technology when it comes to –
Decarbonization of heavy industry – plays a prominent role in cutting out carbon from the sector.
Energy storage for long duration – its longevity cannot be questioned, and with it comes the cost-effectiveness.
Clean transport fuels in terms of shipping and aviation – the impact they have on aviation and shipping in terms of eradicating emissions is a reality.
Replacement of fossil fuels due to industrial heat – with industrial temperatures always on the rise, it is a good alternative that helps in cooling down the environs.
But the fact is that its real deployment needs a balanced and stable policy along with certain long-term investment signals. All said and done, unless there are a robust policy and framework that’s in place, all the above pointers hold no real value.
Major risk – Delays from the governmentÂ
Jackson went on to warn that the UK is indeed at risk of missing its hydrogen opportunity unless the government speeds up its decisions. Being a dynamic segment, there are multiple changes taking place already almost every day, and missing out on leveraging them is like missing the bus.
Some of the prominent issues that have been raised include –
1. Delay in hydrogen strategy updates
Industry players are seeking that the government publishes a clear updated national hydrogen strategy.
2. Slow rollout when it comes to funding programmes
There are many support mechanisms that have been announced however, all of them are progressing pretty slowly.
3. Timelines that are uncertainÂ
Investors, along with project developers, require certain predictable timelines when it comes to funding rounds along with approvals in projects.
Without having this kind of clarity, companies may as well redirect the investment to countries having much stronger support frameworks like the EU or even the United States for that matter.
Investment in hydrogen depends on government signals
It is well to be noted that large hydrogen projects need billions of dollars upfront when it comes to investment along with long-term offtake agreements.
Jackson went on to stress that the government had to –
- Push projects from those planning stages to final investment decisions
- Speed up the hydrogen allocation rounds
- Come with crystal clear transport and storage infrastructure plans
The fact is that sans all these steps, projects may be stalled even before the construction starts.
Losing global competitiveness – the UK is indeed at risk
Interestingly, the UK, which was once regarded as a front-runner when it comes to hydrogen policy, is now witnessing a slowed momentum.
The challenges that cannot be ignored are
- cancellations or delays in the project
- very uncertain demand coming from industry
- high cost of production as compared to fossil fuels
- slow development when it comes to hydrogen pipelines as well as storage
Well, all said and done, the fact remains that if policy clarity does not see an improvement, investors may as well go ahead and choose Europe or the US, where the subsidies along with incentives happen to be more predictable and in favor.
Why hydrogen still makes a differenceÂ
In spite of the challenges, Jackson stressed that hydrogen still remains necessary to attain net-zero emissions.
There is not a shred of doubt about the fact that hydrogen could very well help:
- decarbonizing the steel, chemicals as well refining sectors
- balance the electricity systems, which are at present dominated by the wind as well as solar
- support energy security through decreasing imports of fossil fuel
The UK comes with strong advantages like –
- abundant offshore wind resources
- mushrooming industrial clusters
- potential carbon storage sites that are located in the North Sea.
What industry is looking ahead next?
It is worth noting that the hydrogen industry is calling on the government to –
- To go ahead and publish an updated hydrogen strategy as early as possible so that clarity can be maintained at all levels.
- Roll out funding schemes that have already been promised.
- Ensure to come up with timelines that are transparent for the infrastructure.
- Maintain long-term ambition when it comes to hydrogen rollout.
Jackson insists that the UK is indeed at a pivotal moment either it has to speed up the development now or else risk losing commercial along with environmental benefits that crop up from the domestic hydrogen industry.