Ian Brass is Public Affairs Director for Europe at Air Products.
The Prime Minister has just set out a new commitment to prioritise growth and jobs to counter the risk of Britain going into what looks now to be a fairly deep recession. At the same time, there’s an urgent need to reduce the United Kingdom’s exposure to global energy supply threats and the inflation they create.
The two problems are clearly linked, so what can government do to improve our energy policy in 2023 in order to achieve both goals?
Hydrogen must be a big part of this answer. It not only presents a growing opportunity to help provide more secure and clean electricity, heating and fuels; it also offers a major source of new industrial growth, and thus the creation of skilled jobs across the country.
The Government has recognised this potential in the recent past, and in 2021 set out ambitions for the UK to be a ‘global leader’ in hydrogen.
That announcement was made only last year. But already it was two prime ministers ago, and whilst other European countries work hard to accelerate hydrogen production, it remains less clear how Britain will make equivalent progress with this economically-attractive energy solution.
Green hydrogen would be a particularly powerful growth-driving technology for the UK. It is produced by separating hydrogen from oxygen using renewables-fed electrolysis, capturing the hydrogen and releasing the oxygen harmlessly into the air.
There is very rapidly growing international demand for such hydrogen and substantial latent demand in the UK; however unless action is taken now a functioning British market looks years away.
The issue is the lack of any domestic development of serious electrolyser capacity anytime soon. To encourage investment, we must kick-start the market by quickly making available substantial quantities of green hydrogen. This would show hesitant investors and buyers that a UK green hydrogen market is on the way.
This is what Air Products, the world’s largest hydrogen supplier, aims to bring substantial new investment in green hydrogen capacity and distribution, providing an early injection of British green hydrogen.
The production facility will be at Immingham in the Humber, a top priority area for levelling up, and will create billions in growth and thousands of new jobs. The hydrogen produced will reduce emissions equivalent to taking up to 20,000 diesel lorries off our roads.
One issue investors like us face, however, is the significant recent turmoil in British politics and associated changes in policy, such as the recall of the investment zones policy by the previous chancellor.
Since we started to discuss our plans, there have been three different prime ministers, four chancellors, and innumerable other changes that make it difficult to engage with government, even when offering major inward investment.
The key is to accelerate policy progress towards the creation of a market that investors can buy into. Importing a substantial supply of renewable raw material, which can be used to produce large quantities of green hydrogen in the UK, is the only realistic step to achieving this quickly.
Our scheme requires no new state policy; with effort and clarity from government, a market will be built. Our plans will not crowd out production from domestic electrolysis, but would instead be an essential precursor to its growth: without importing raw materials, a green hydrogen economy will take many years to emerge, if at all.
More important still is that green hydrogen production from imported renewable raw materials can be considered home-grown; the raw materials will be converted to hydrogen in the UK and distributed throughout the country, therefore improving British energy security.
We urge the Government to work with industry to set out a clear path for delivery of green hydrogen, thereby grasping the growth opportunities that this exciting development represents. Only by doing so will the UK achieve the hydrogen leadership position to which it aspires.