The UK government has pledged £500 million to support the development of hydrogen infrastructure, as part of its broader Plan for Change initiative. The funding, revealed in the upcoming 2025 Spending Review, will go toward establishing the country’s first regional hydrogen transport and storage network.
This new network aims to connect hydrogen producers with end users such as power stations and industrial facilities—an essential step in reducing costs and building a functional hydrogen economy in the UK.
The investment comes as a welcome development for the domestic hydrogen sector. A recent report from the Hydrogen Energy Association underscored the urgent need to link hydrogen producers with off-takers. The lack of this infrastructure, the report notes, leads to high transport costs, which in turn inflate hydrogen prices.
The issue of hydrogen affordability—particularly for green hydrogen—will be a major topic at Solar Media’s Green Hydrogen Summit UK, taking place in London on 1–2 July. On the second day of the event, Urbano Troncoso Pérez, Executive Director of Structured Finance at Santander, will explore how policy tools can help make hydrogen financially competitive.
Jobs, Energy Security, and Decarbonisation
In addition to decarbonising energy-intensive sectors, the new hydrogen infrastructure is expected to create thousands of skilled jobs across industrial regions like Merseyside, Teesside, the Humber, and within the broader supply chain.
The investment will also enable hydrogen to be used for long-duration energy storage, with technologies such as salt cavern storage helping to balance supply and demand during peak usage periods. Crucially, it will support emissions reductions in hard-to-abate industries including refineries, steel production, and heavy transport.
Energy Secretary Ed Miliband emphasised hydrogen’s potential to support the UK’s industrial base. “We are investing over half a billion pounds in our industrial heartlands to deliver jobs and energy security for Britain,” Miliband said. “By building hydrogen networks, we are securing homegrown energy that will power British industry for generations to come.”
Green Hydrogen Targets and Global Opportunity
Hydrogen has long been identified as a key component in the UK’s transition to net zero. The government has set targets to produce 5 GW of green hydrogen and 10 GW of low-carbon (blue) hydrogen by 2030.
As a versatile energy carrier, hydrogen can be used in transport, power generation, and, most critically, for decarbonising industries that are difficult to electrify. However, despite rising interest in recent years, the global hydrogen industry has experienced setbacks, primarily due to underinvestment. Australia, for example, saw energy giant Origin Energy exit the hydrogen space entirely in 2023.
Still, the Hydrogen Energy Association believes the UK can strengthen its hydrogen ambitions. Its report recommends that the government adopt a model similar to the European Union’s, which has introduced strong investment incentives to support the sector.
Learning from the EU
The EU intends to generate 10 million tonnes of hydrogen domestically and import another 10 million tonnes by 2030. These targets could position the UK as a key exporter of green hydrogen to the continent.
Through the Renewable Energy Directive II (REDII), the EU has set binding targets to increase green hydrogen use in industry and transport. By 2030, 42% of hydrogen used in industry must come from Renewable Fuels of Non-Biological Origin (RFNBOs), rising to 60% by 2035.
The Hydrogen Energy Association argues that adopting a similar policy in the UK would send a strong signal to investors and help drive demand. The EU’s approach has created clear incentives for increasing the share of green hydrogen in heavy industry,” the report states. This has already spurred significant market growth, and the UK could benefit from implementing a comparable framework.