UK launches world’s first hydrogen subsidy scheme

The UK government has officially opened the world’s first national low carbon subsidy scheme for hydrogen. The scheme is aimed at achieving a target of 1GW of clean hydrogen production by 2025 on the way to 10GW of low carbon hydrogen capacity by 2030.

The UK government in 2020 announced a plan to develop 5GW of low carbon hydrogen generation by 2030, but earlier this year it doubled the target to 10GW of low carbon hydrogen production capacity by 2030.

The target is split between electrolytic hydrogen, more commonly termed green hydrogen, and – more controversially – low carbon hydrogen, or blue hydrogen made from fossil fuels and with the promise of carbon capture.

The UK government’s Department for Business, Energy and Industrial Strategy (BEIS) outlined the specifics of how they would go about supporting hydrogen development, committing to awarding up to 1GW of contracts to electrolytic projects in two allocation rounds in 2023 and 2024.

These contracts will be awarded under the Hydrogen Business Model (HBM) which will see ongoing revenue support back the development of low carbon hydrogen.

The first allocation round is expected to support at least 250MW of green hydrogen.