The UK has the opportunity to become a world-leading blue hydrogen producer within the next decade, even outpacing current government targets, but only if the nascent sector gets the right policy support, according to a new industry report.

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Published this week by the UK Hydrogen & Fuel Cell Association (HFCA), the position paper said the UK could be producing 10 gigawatts of blue hydrogen by 2030 and 80GW by 2050.

That is well above a 5GW target of “low-carbon hydrogen” production capacity by 2030 outlined in last year's UK Energy White Paper, although the Westminster government has not stated a preference between green and blue hydrogen.

The report states that in the near-term blue hydrogen will be the fastest way to deploy large volumes of the cleaner-burning gas across the UK economy and support the ramp up of green hydrogen production in the longer term.

Calling for clarity

During a webinar to mark the report’s publication, HFCA pointed out that project developers are still waiting for clarity on a number of issues, including the business models that will underpin the sector.

Sam French, business development director at HFCA member Johnson Matthey, said: “Blue hydrogen offers an exciting opportunity to help the UK meet its carbon reduction targets up to 2050 as well as supporting economic growth throughout the UK. The next step for industry is to deploy technology at scale. Investment and clear rules from the government will be crucial.”

HFCA is calling for the introduction of government support — akin to the “Contracts for Difference” subsidy mechanisms already in place for renewables — in order to make production commercially viable.

The trade body, which represents a number of key players in the sector, also called for stringent targets to be set to ensure hydrogen production is as emissions free as possible.

“Government needs to ensure that blue hydrogen carbon emissions standards are standardised and trusted,” said the report.

Blue hydrogen is produced by converting coal or gas into hydrogen and storing the CO2 emissions from its production, but the process is not totally emissions free.

Green hydrogen is produced from the electrolysis of water with energy supplied from renewable energy such as hydro, solar or wind.

Many of the current proposed blue hydrogen projects in the UK are based in clusters where the gas can be produced before servicing industrial processes.

The UK government wants to see CCUS in at least two industrial clusters by the mid-2020s.

The main contenders are projects located in Scotland, north-west England and around the Humber Estuary and on Teesside on the east coast.

Room for blue and green in UK hydrogen future

Commenting on the paper, UK Energy, Clean Growth & Climate Change Minister Anne-Marie Trevelyan said: “I welcome this paper from the UK HFCA. It clearly highlights the role CCUS-enabled or ‘blue’ hydrogen can play in reaching the UK’s legally binding climate change commitments, and in helping to provide flexible energy across heat, power and transport.”

The report comes ahead of the publication of the UK’s first ever Hydrogen Strategy.

HFCA chief executive Celia Greaves said the body supported the government’s strategy of a “technology agnostic approach to hydrogen”.

“We know that both blue and green hydrogen will play a key part in helping the government achieve their net zero goals,” she said.

“However, if the government is to achieve their ambitions, the upcoming strategy needs to provide clarity and greater certainty around the support that will be available for hydrogen. This will enable the investment to flow in time so we can get production going in time to meet the UK’s 2035 78% carbon reduction target.”

Lack of clarity holding back £1.6 billion storage development

The need for further clarity around the government's strategy on hydrogen and what subsidy guarantees will be given to allow the hydrogen industry to scale up are holding up a £1.6 billion ($2.2 billion) plan to overhaul the UK's largest gas storage facility.

UK utility Centrica is looking to convert its Rough gas storage site in the North Sea to store hydrogen instead of methane.

However, more clarity and backing from the government is needed for the company to push the button on the project that could create up 4000 jobs during construction, an offical said.

“We have some grand plans for Rough, subject to government backing. It is a £1.6 billion development, no-one is going to spend £1.6 billion if there isn’t some guaranteed return," managing director of Centrica Business Solutions, Greg McKenna, was quoted as saying by BusinessLive.

"We are looking for some government support model - it doesn’t need money to go into it. If we can get a regulated model from government we are prepared to go ahead and convert.”

McKenna also told The Telegraph this week that Centrica could have the Rough storage site up and running for hydrogen by 2025 or 2026, if more clarity was given this year.

Centrica made the decision to stop using the Rough storage site in 2017 and produce its remaining gas, with remediation of the aging facility deemed not commercially viable after a number of issues. It currently intends to start decommissioning the site off the Yorkshire coast in 2023.

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