The successful projects will invest over £400 million in the next 3 years, generating more than 700 jobs in local communities across the UK and delivering 125 MW of new hydrogen for businesses including:
Sofidel in South Wales, who will replace 50 percent 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 percent 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
“Hydrogen presents a massive economic opportunity for the UK, unlocking over 12,000 jobs and up to £11 billion of investment by 2030” said Ms Coutinho. “Today’s announcement represents the largest number of commercial scale green hydrogen production projects announced at once anywhere in Europe. These 11 major new hydrogen projects across the UK will create over 700 jobs and deliver new opportunities from Plymouth in England to Cromarty in Scotland.
The funding will help to scale up the UK’s hydrogen economy towards the government’s ambition to deploy up to 10 GW 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. This includes ambitious plans to boost hydrogen capacity up to 1.5 GW across these rounds, and award funding to projects to help deliver up to 4 GW of CCUS-enabled, or blue, hydrogen and 6 GW of green hydrogen by 2030 – aiming to give businesses the confidence they need to invest in the UK.
Ministers have also announced their decision to support hydrogen blending in certain scenarios – subject to an assessment of safety evidence and final agreement. Currently, less than 1 percent of the gas in distribution networks is hydrogen. Under proposals, hydrogen could be blended with other gases in the network as an offtaker of last resort, working to reduce costs in the hydrogen sector by helping producers, and to support the wider energy system.
Ministers have decided not to proceed with a hydrogen trial in Redcar, as the main source of hydrogen will not be available. Instead, the government said it will assess evidence from a neighbourhood trial in Fife, as well as similar schemes across Europe, to decide in 2026 whether and how hydrogen could help households in the journey to net zero.
However, Juliet Phillips, Senior Policy Advisor, Clean Economy, at climate change think tank E3G believes that without the evidence base gathered from the hydrogen heating trail in Redcar it will be nearly impossible for the government to make a positive decision on whether to allow nationwide hydrogen for heating.
“Today marks another nail in the coffin for pipe dreams of hydrogen heating” said Ms Phillips. “With the Redcar trail scrapped, it will be nearly impossible for the government to make a positive decision to permit nationwide hydrogen heating in 2026. While some gas lobbyists may want you to believe that the decision to go ahead with blending is a stepping stone towards decarbonising fossil gas, the government has made clear this is far from the case. Hydrogen producers will be permitted to blend small quantities of hydrogen into gas distribution networks as a “last resort”, and only if the safety case is proven. The writing is on the wall for fossil heating systems of the past: it’s time to prepare for a clean, electric future.”
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