Policy & Socio-Economics

Hydrogen is one of the key solutions to decarbonising the UK economy along with other carbon abatement solutions such as electrification CCUS biofuels and energy efficiency. It provides a low carbon alternative to fossil fuels that has many of the same desirable features such as burning with a high temperature flame without producing carbon emissions during combustion. Hydrogen will be particularly valuable in hard-to-decarbonise sectors that have few cost-effective alternatives including elements of industry heavy transport and dispatchable power generation. However it’s use could be much more widespread depending on how costs preferences and policy for different low carbon solutions develop. The Government’s Hydrogen Strategy estimates that based on analysis from the Climate Change Committee (CCC) in 2050 between 20% and 35% of the UK’s final energy demand could be met with low carbon hydrogen1 . While hydrogen provides a promising solution to reducing emissions current deployment of low carbon hydrogen is low with almost all hydrogen in the UK produced from unabated fossil fuels resulting in high emissions. In the UK hydrogen production must meet the Low Carbon Hydrogen Standard (LCHS) to access government support. This is currently set at 20g CO2 e/MJ(LHV) and will ensure that future deployment will deliver significant emissions reductions when switching from fossil fuels2. The period to 2030 will be a critical time for the UK to seize the economic opportunity presented by low carbon hydrogen sector. Internationally increasing attention has been placed on hydrogen as a solution to global emissions. In the USA the Inflation Reduction Act (IRA) has provided fixed rate tax credits of up to $3/kg (£2.4/kgII) for clean hydrogen production3. Closer to home the EU is targeting 10 million tonnes of domestic electrolytic production and an additional 10 million tonnes of electrolytic hydrogen imports by 20304. This will be achieved through a variety of policy levers including an auction for fixed price subsidy support for electrolytic production with a ceiling of €4.5/kg5 (£3.84/kgIII). In the UK Government have set an ambitious target of up to 10 GW of low carbon hydrogen production by 2030 with at least half of this from electrolytic sources6. This will be supported by the Hydrogen Production Business Model (HPBM) a two-way variable CfD which could potentially provide hydrogen for a price as low as the natural gas price7 . As global supply chains investment and skills are in international competition the UK must continue its ambitious hydrogen aspirations to ensure the decarbonisation and economic opportunity presented by low carbon hydrogen is captured. This study estimates the economic impact of the low carbon hydrogen sector in the UK by 2030. The impact is assessed by estimating the costs of hydrogen deployment and applying employment and GVA multipliers to these costs based on historic economic activity. These estimates are broken down by different forms of low carbon hydrogen production and end use as well as the enabling infrastructure required to connect production and demand namely hydrogen networks and storage. Both the employment and GVA are estimated for each of these value chain elements for every year between 2024 and 2030. Employment and economic growth from the hydrogen sector will be created across the UK with many benefits arising in regions that have faced historic underinvestment such as the industrial clusters and Scotland. Beyond the high-level economic benefits estimated in this study the hydrogen sector creates an opportunity for the hundreds of thousands oil and gas sector jobs in the UK to transition to a low carbon alternative.

This report can be found on Hydrogen UK's website.

This report explores how hydrogen could be taken up in the UK and how this in turn translates to each sector from both global and UK perspectives to understand the practical implications of global and UK targets and projections on hydrogen innovation opportunities:

♦ Assessing demand for hydrogen sets out the context and the approach taken in the assessment of global and UK sector hydrogen needs including the development of specific UK scenarios for hydrogen deployment and innovation across the energy system and supply chain.

♦ Key insights discusses the insights and an overview of the outputs from the implementation of the UK deployment scenarios in whole energy system modelling.

♦ Hydrogen production storage and distribution and demand explore these areas in more detail setting out the current state and potential trajectories for hydrogen in each sector both globally and in the UK up to 2050.

This report can also be downloaded free on the Hydrogen Innovation Initative website.

Future pathways for Great Britain’s energy system decarbonization have highlighted the importance of lowcarbon hydrogen as an energy carrier and demand flexibility support. However the potential application within various sectors (heating industry transport) and production capacity through different technologies (methane reformation with carbon capture biomass gasification electrolysis) is highly varying introducing substantial uncertainties for hydrogen infrastructure development. This study sets out infrastructure priorities and identifies locational flexibility for hydrogen supply and demand options. Advances on limitations of previous research are made by developing an open-source model of the hydrogen system of Great Britain based on three Net Zero scenarios set out by National Grid in their Future Energy Scenarios in high temporal and spatial resolution. The model comprehensively covers demand sectors and supply options in addition to extending the locational considerations of the Future Energy Scenarios. This study recommends prioritizing the establishment of green hydrogen hubs in the near-term aligning with demands for synthetic fuels production industry and power which can facilitate the subsequent roll out of up to 10GW of hydrogen production capacity by 2050. The analysis quantifies a high proportion of hydrogen supply and demand which can be located flexibly.

Chapters:<br/>♦ Introduction by Rainer Quitzow and Yana Zabanova<br/>♦ The EU in the Global Hydrogen Race: Bringing Together Climate Action Energy Security and Industrial Policy by Yana Zabanova<br/>♦ Germany’s Hydrogen Strategy: Securing Industrial Leadership in a Carbon–Neutral Economy by Almudena Nunez and Rainer Quitzow<br/>♦ France’s Hydrogen Strategy: Focusing on Domestic Hydrogen Production to Decarbonise Industry and Mobility by Ines Bouacida<br/>♦ International Dimension of the Polish Hydrogen Strategy. Conditions and Potential for Future Development by Michał Smoleń and Wojciech Żelisko<br/>♦ Hydrogen Affairs in Hungary’s Politically Confined Ambition byJohn Szabo<br/>♦ Spain’s Hydrogen Ambition: Between Reindustrialisation and Export-Led Energy Integration with the EU by Ignacio Urbasos and Gonzalo Escribano<br/>♦  Italian Hydrogen Policy: Drivers Constraints and Recent Developments by Andrea Prontera<br/>♦  Hydrogen Policy in the Netherlands: Laying the Foundations for a Scalable Hydrogen Value Chain by Roelof Stam Coby van der Linde and Pier Stapersma<br/>♦ Hydrogen Strategy of Sweden: Unpacking the Multiple Drivers and Potential Barriers to Hydrogen Development by Stefan Ćetković and Janek Stockburger<br/>♦  Norway’s Hydrogen Strategy: Unveiling Green Opportunities and Blue Export Ambitions by Jon Birger Skjærseth Per Ove Eikeland Tor Håkon Jackson Inderberg and Mari Lie Larsen<br/>♦ The Geopolitics of Hydrogen in Europe: The Interplay between EU and Member State Policies by Rainer Quitzow and Yana Zabanova

Transitioning from carbon-intensive steam methane reforming to low-carbon hydrogen production is essential for decarbonizing the European industrial sector. However the employment impact of such a transition remains unclear. Here we estimate the effects using a transition pathways optimization model and industrial survey data. The results show that an electrolysis-based hydrogen sector transition would create 40000 jobs in the hydrogen sector by 2050. However these jobs are not equally distributed with Western Europe hosting the largest share (40%) and 20% of current hydrogen-producing regions experiencing net job decreases. Even after accounting for renewable energy jobs created by electrolysis-driven electricity demand growth the 2050 low-carbon hydrogen workforce would provide only 10% of the jobs currently offered by European fossil fuel production. Numerous uncertainties and regional development inequities suggest the need for sector-diversified workforce transition plans and training programs to foster skills suited to multiple low-carbon opportunities.

Importing substantial amount of green hydrogen from countries like South Africa which have abundant solar and wind potentials to replace fossil fuels has attracted interest in developed regions. This study analyses South African strategies for improving and decarbonizing the power sector while also producing hydrogen for export. These strategies include the Integrated Resource Plan the Transmission Development Plan Just Energy Transition and Hydrogen Society Roadmap for grid connected hydrogen production in 2030. Results based on an hourly resolution optimisation in Plexos indicate that annual grid-connected hydrogen production of 500 kt can lead to a 20–25% increase in the cost of electricity in scenarios with lower renewable energy penetration due to South African emission constraints by 2030. While the price of electricity is still in acceptable range and the price of hydrogen can be competitive on the international market (2–3 USD/kgH2 for production) the emission factor of this hydrogen is higher than the one of grey hydrogen ranging from 13 to 24 kgCO2/kgh2. When attempting to reach emission factors based on EU directives the three policy roadmaps become unfeasible and free capacity expansion results in significant sixteen-fold increase of wind and seven-fold increase in solar installations compared to 2023 levels by 2030 in South Africa.

Many developing countries seek to participate in the emerging global green hydrogen industry not only as exporters of green hydrogen and its derivatives to Europe and the Far East but also to use it for their own energy security and green transition. They hope that new development paths will lead to late-comer industrialisation. This article assesses corresponding prospects in Chile and Namibia two countries that pursue particularly ambitious plans on green hydrogen. To better understand the chances for path creation ex ante the authors draft an innovative framework that refers to context factors – that is structure – and three types of transformative agency. Against the backdrop of information from secondary sources and a series of expert interviews they uncover sound institutional reforms and initiatives of place-based leadership to promote the green hydrogen industry. However Chile and Namibia lack Schumpeterian entrepreneurship. It therefore remains to be seen whether new development paths will be inclusive contributing to in-country development. Typical downsides of extractive industries in resource peripheries might occur.

This report lays out roadmaps for the nine technology families identified in the UK Hydrogen Innovation Opportunity. The content in these roadmaps has been developed through a combination of extensive industrial engagement and aggregation of existing sector and technology roadmaps. This document also signposts to reports that highlight innovation challenges and opportunities for two underpinning technology families - materials and digital. The technology roadmaps in this document each include the following:

♦ UK and global market forecast for 2030 and 2050 for the respective technology family.

♦ Key technologies that make up the technology family.

♦ The associated innovation opportunities associated with each key technology together with development and industrialisation timelines and the sectors that will benefit from the innovation.

The list of innovation opportunities on each roadmap is by no means exhaustive but they are a sample that were selected because they highlighted some key innovation actions for the UK. To make this selection a range of factors were considered including global and UK economic demand the UK political imperative and UK potential to win market share. The development and industrialisation timelines are recommendations only and do not signify that this work is already planned or funded.

This report can also be downloaded for free on the Hydrogen Innovation Initiative website.

Purpose: The Training section of the Education and Training module of the FCHO offers a repository of training available in Europe. In addition to the training programmes Educational materials which are publicly accessible online are also available to access on the FCHO. https://www.fchobservatory.eu/observatory/education-and-training Scope: The training courses are displayed by location within a map and users can explore the data by selecting the type of training of interest. Two additional filters on the language and the focus of the training are available to refine the search according to user needs. Users of the online tool can be students professionals and individuals wishing to learn and be trained on FCH. To complement this mapping a repository of online resources is accessible on the FCHO. Users may retrieve reliable materials available for self-learning. Key Findings: Master programmes and professional training courses were the most mapped categories. There is a prevalence of training courses offered by Western European countries in the mapping. The majority of the training courses mapped are targeted at technicians engineers and doctorate. For Bachelor and Master programmes FCH is more often an element integrated in a programme than its main focus. “Hydrogen Production” and “Hydrogen end-uses: transports” were the most selected focus of courses among the 11 categories proposed. “Regulations Codes and Standards” was the least selected focus with only one training out of five tackling these aspects. Professional training is more often focusing on end-uses and safety than Master programmes. Master programmes put a strong emphasis on “Basic electrochemistry” “Hydrogen production”. European projects are the main source for publicly accessible materials to learn on FCH. Most of the materials listed are available in English. “Hydrogen End-Uses” is the focus category the most common in the materials listed.

Purpose: The technology and market module of the FCHO presents a range of statistical data as an indicator of the health of the sector and the progress in market development over time. https://www.fchobservatory.eu/observatory/technology-and-market Scope: Fuel cell shipment data is presented on a global basis. Other sections of the technology and market chapter (HRS data and FCEV data) are presented on a European basis. The report spans January 2020 – December 2020. Key Findings: COVID-19 has without doubt impacted the deployment of fuel cells and hydrogen in 2020 compared to industry expectations: Global Fuel Cell shipments > 1.3 GW Europe Fuel Cell shipments up to 148.6 MW Europe HRS in operation or under construction 162 FCEVs up 41% to 2774