The government has laid out new plans for the hydrogen sector which it said could create 9,000 UK jobs and unlock £4 billion of investment by 2030.

Hydrogen could play an important role in decarbonising industries like chemicals, oil refineries, power, and heavy transport like shipping, HGV lorries and trains according to the government, by helping these sectors move away from fossil fuels.

In addition, the government said its analysis predicted that between 20 and 35 per cent of the UK’s energy consumption by 2050 could be hydrogen-based, and that the industry could potentially employ 100,000 people and be worth up to £13 billion by 2050.

The government has now launched a public consultation on its preferred hydrogen business model, which it said is designed to overcome the cost gap between low carbon hydrogen and fossil fuels.

The government is also consulting on the design of its new £240 million “Net Zero Hydrogen Fund”, which aims to support the commercial deployment of new low carbon hydrogen production plants across the UK.

The government said its approach was based on the UK’s previous experience with offshore wind, where it employed a “Contracts for Difference” (CfD) scheme, which it claimed incentivised investment in renewable energy by “providing developers with direct protection from volatile wholesale prices” and protecting consumers from “paying increased support costs when electricity prices are high.”

The government said other measures forming part of its carbon strategy include:

• Outlining a ‘twin track’ approach to supporting multiple technologies including ‘green’ electrolytic and ‘blue’ carbon capture-enabled hydrogen production and committing to providing further detail in 2022 on its production strategy.

• Collaborating with industry to develop a UK standard for low carbon hydrogen, giving certainty to producers and users that the hydrogen the UK produces is consistent with net-zero while supporting the deployment of hydrogen across the country.

• Undertaking a review to support the development of the necessary network and storage infrastructure to underpin a thriving hydrogen sector.

• Working with industry to assess the safety, technical feasibility, and cost effectiveness of mixing 20 per cent hydrogen into the existing gas supply, which the government said could deliver a 7 per cent emissions reduction on natural gas.

• Launching a hydrogen sector development action plan in early 2022 setting out how it will support companies to secure supply chain opportunities, skills, and jobs in hydrogen.

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