Sun-rich regions (like deserts in the Middle East and North Africa) have vast potential for generating green hydrogen from solar-powered electrolysis, which Europe & UK hopes to tap into.
Hydrogen has rapidly emerged as a cornerstone of clean energy strategies in the UK and Europe. In the push to reach net-zero emissions by 2050, hydrogen is viewed as a crucial tool to decarbonize sectors that are difficult to electrify, such as heavy industries (steel, cement, chemicals) and long-distance transport (shipping, aviation) [1].
Unlike fossil fuels, hydrogen emits only water at the point of use, no carbon, making it an attractive clean-burning fuel for the future. However, hydrogen is not a silver bullet; its production and use come with challenges, and it must be applied strategically in areas where it adds real value [1].
This blog will examine the emerging trends, policy shifts, and controversies shaping the hydrogen supply chain in the UK and Europe, providing a clear picture for policymakers, industry professionals, academics, and the general public alike.
Hydrogen's Role in the Clean Energy Transition
Both the European Union and the UK have positioned hydrogen as central to their clean energy transition plans. Currently, hydrogen constitutes less than 2% of Europe's energy consumption, with most being "grey" hydrogen produced from natural gas [2]. The future vision, however, is much more ambitious:
- Under the EU's Hydrogen Strategy, enhanced by the 2022 REPowerEU plan, Europe aims to produce 10 million tonnes of renewable hydrogen domestically and import an additional 10 million tonnes annually by 2030 [2].
- By 2050, the EU expects hydrogen to supply approximately 10% of its total energy needs [2], reducing emissions in energy-intensive industries and heavy transport.
The UK similarly views hydrogen as essential for achieving net-zero. In 2022, the British government's Energy Security Strategy doubled its hydrogen production target to 10 GW of low-carbon hydrogen capacity by 2030, with at least half coming from "green" hydrogen produced via renewables [3]. For context, 10 GW could supply industry, power generation, and vehicles with hydrogen equivalent to a significant portion of current gas usage.
Types of Hydrogen:
- Green hydrogen: Often considered the gold standard, is produced by splitting water using renewable electricity, generating hydrogen with zero direct CO₂ emissions [3].
- Blue hydrogen: Produced from natural gas with carbon capture and storage (CCS), as a transitional solution for the 2020s [3]. While blue hydrogen can be produced at large scale in industrial hubs (utilizing North Sea gas and offshore CO₂ storage), it isn't emission-free, current carbon capture technology still allows 5–15% of CO₂ to escape, and upstream gas extraction creates additional emissions [4].
This dual-track approach aims to rapidly establish a hydrogen economy, though it has generated debate as discussed later.
Why hydrogen?
- It can replace fossil fuels where electrification is difficult, steel plants using hydrogen instead of coal, and heavy-duty vehicles using hydrogen-based fuels where batteries don't work.
- It also stores renewable energy: excess solar or wind can produce hydrogen that's stored long-term or transported where needed, crucial for balancing grids dependent on intermittent renewables.
- Hydrogen adds flexibility to clean energy systems as a decarbonization tool, not an end goal [1].
As one environmental think-tank noted, "hydrogen is a tool, not the end goal “ , the objective is a zero-carbon, secure, and affordable energy system [1].
Emerging Trends in Hydrogen Production and Supply Chains
1. Green Hydrogen Scale-up: Europe and the UK are witnessing substantial investment in green hydrogen production.
- Gigawatt-scale electrolyzers are being planned alongside renewable energy farms in the North Sea and Southern Europe.
- The EU's 10 Mt renewable hydrogen target for 2030 has spurred project development that could potentially exceed 14.7 Mt if all planned projects materialize [5].
- Germany, the Netherlands, Spain, and Portugal are emerging as green hydrogen hubs.
- The UK is leveraging its world-leading offshore wind capacity to produce electrolytic hydrogen, particularly using surplus renewable power that would otherwise be wasted [3].
Financial support mechanisms include:
- The €3 billion European Hydrogen Bank to subsidize production and bridge the price gap with fossil fuels [6].
- The UK has established a Hydrogen Business Model similar to renewable Contracts-for-Difference, guaranteeing prices for producers [3].
These initiatives are crucial as clean hydrogen remains more expensive than fossil alternatives.
2. Infrastructure Development: Europe is creating dedicated hydrogen infrastructure through the "European Hydrogen Backbone" - a continent-spanning pipeline network connecting production centres with industrial clusters.
- By 2030, Europe could have 30,000 km of hydrogen pipelines [5], primarily repurposed from existing natural gas infrastructure.
- Germany has committed €20 billion for a 10,000 km network, while the Netherlands has begun converting pipelines for hydrogen transport [5].
- Underground salt caverns are being developed for large-scale storage to ensure year-round supply reliability [7].
International Hydrogen Transport
Ammonia (NH₃) is gaining popularity as a hydrogen carrier for international shipping. European developers are exploring green ammonia imports from regions with abundant renewables like North Africa, the Middle East, and Australia [3].
- The EU plans to import 10 Mt of green hydrogen annually by 2030, matching its domestic production target [8].
- Germany anticipates importing over half its hydrogen needs [8] and has established agreements with countries including Australia, Saudi Arabia, and Namibia.
3. Industrial Adoption: Major industries are securing hydrogen supplies, with European steelmakers and refiners issuing tenders for significant volumes.
- TotalEnergies sought 500,000 tonnes of renewable hydrogen annually for its European refineries in 2023 [5].
- Thyssenkrupp is preparing to use pipeline hydrogen for its German steelworks by 2028 [5].
- Transportation sectors are also embracing hydrogen, with fuel cell buses operating in several European cities and the UK, alongside trials for hydrogen-powered trains and long-haul trucks.
These early adopters are vital for technology validation and cost reduction. Policymakers are developing mechanisms to stimulate hydrogen demand in parallel with supply growth [5].
Policy Shifts and Support in the UK & EU
European governments are actively shaping hydrogen's future through strategic policies, with recent shifts based on new evidence and market realities.
🇪🇺 European Union:
The EU's hydrogen ambitions accelerated after the 2022 energy crisis, with REPowerEU targeting 20 Mt by 2030 to reduce Russian gas dependence [8]. Key policy measures include:
- Binding targets for renewable hydrogen in industry and transport by 2030 [2]
- Stringent standards requiring at least 70% emissions reduction for "low-carbon" hydrogen [2]
- Substantial funding through the European Hydrogen Bank and other programs
The EU is effectively replicating its successful renewable energy playbook: setting targets, standardizing rules, providing funding, and encouraging innovation.
🇬🇧 United Kingdom:
The UK doubled its 2030 hydrogen target to 10 GW in 2022 (half from green hydrogen) [3]. Supporting mechanisms include:
- The £240 million Net Zero Hydrogen Fund
- A Contract-for-Difference style business model to subsidize production costs
By late 2023, several major projects were shortlisted for government support. The UK has established a Low-Carbon Hydrogen Standard to ensure high emissions reduction, even for blue hydrogen projects [3].
A significant UK policy shift occurred regarding home heating. Initially considering hydrogen for residential use, the government reversed course in 2023 after evidence showed hydrogen heating would be inefficient and costly compared to alternatives [1]. The UK banned new gas boilers (including hydrogen-ready ones) in new homes from 2025, effectively choosing heat pumps over hydrogen [2]. This pragmatic decision refocuses hydrogen deployment on industrial clusters and heavy transport where it adds most value.
This trend toward targeted hydrogen use is evident across Europe, with Germany's 2023 Hydrogen Strategy similarly prioritizing industrial applications over residential heating [1]. Recent policy shifts reflect a more strategic approach: concentrating hydrogen in sectors where it's truly essential while favoring direct electrification elsewhere.
Controversies and Challenges in the Hydrogen Transition
As with any transformative shift, the hydrogen transition brings key debates and challenges:
"Green" vs "Blue" Hydrogen
The central controversy concerns which hydrogen type deserves support.
- Green hydrogen (from renewables) offers zero emissions but higher costs
- Blue hydrogen (from natural gas with carbon capture) provides cheaper, larger-scale production but retains some emissions
The UK's twin-track approach supporting both has divided experts, some see blue hydrogen as a necessary bridge, others as a fossil fuel lock-in [4,7]. Environmental advocates argue resources should focus on scaling green hydrogen directly, while pragmatists support blue hydrogen with stringent emissions standards as an interim solution. Europe generally favors green hydrogen, while the UK supports both approaches with careful limits.
Strategic Application
Experts advocate the "Electrify First" principle, use direct electrification where feasible (passenger vehicles, heating) and reserve hydrogen for hard-to-electrify sectors (steel, shipping) [1].
- Converting electricity to hydrogen and back involves significant efficiency losses
- For example, hydrogen heating uses 7 times more energy than heat pumps and could increase consumer bills by 86% [1]
- Hydrogen excels in specific applications (green steel, fertilizers, shipping) but isn't a universal solution
Infrastructure Challenges
Building the hydrogen economy requires massive investment in production facilities, pipelines, and storage. The IEA warns that only 7% of planned global hydrogen projects may materialize by 2030 due to financing uncertainties [5].
Technical hurdles include:
- Hydrogen embrittlement of metals
- Low volumetric energy density
- Safety concerns
All requiring specialized engineering solutions.
Global Competition
The hydrogen race extends beyond Europe, with the US, Japan, China, and others investing heavily. The US Inflation Reduction Act has drawn investment away from Europe with generous tax credits [8].
Renewable-rich regions could become hydrogen exporters, creating new energy relationships and requiring international standards for "green hydrogen" certification. This evolving market offers opportunities to connect renewable-rich regions with energy-intensive economies through clean hydrogen supply chains.
Conclusion: Perspective on Hydrogen's Future
Hydrogen presents a vital opportunity to reduce carbon emissions in sectors where decarbonization is most challenging, with the UK and Europe leading this emerging economy. Recent developments show:
- Promising technology advancements
- Cost reductions
- Strong political support backed by substantial funding
Policies have wisely focused on hydrogen's most effective applications while ensuring low-carbon production. Scientific scrutiny has helped distinguish between hydrogen's essential uses and areas where other solutions are more appropriate. The public conversation has matured considerably, moving beyond oversimplified claims toward a nuanced understanding of hydrogen's specific value in our energy transition.
Future Outlook
The hydrogen landscape is rapidly evolving with frequent project and policy announcements. Stakeholders should monitor both technological advancements and policy developments. In the coming years, we'll see:
- Large-scale production facilities
- Expanded pipeline networks
- Increasing industrial adoption of hydrogen solutions
- Healthy debate ensuring each application meaningfully contributes to climate goals
A balanced approach to "The Hydrogen Revolution" makes this complex topic accessible to broad audiences. Hydrogen has transitioned from theoretical concept to practical business and policy reality. By maintaining scientific integrity and smart policy development, the UK and Europe can maximize hydrogen's potential as a key component of a clean, secure energy future [1].
References
[1] EDF Blogs. Why hydrogen infrastructure must be designed and built for purpose.
[2] European Commission. REPowerEU Affordable, secure and sustainable energy for Europe.
[3] Charles Russell Speechlys. Hydrogen Hurdles: navigating the path to net zero in the UK.
[4] The Guardian. UK plan to replace fossil gas with blue hydrogen ‘may backfire’
[5] S&P Global Topics. Hydrogen: Beyond the Hype
[6] Clean Air Task Force (CATF). The European Hydrogen Bank – Europe’s latest effort to enable the continent’s hydrogen revolution
[7] JD Supra. The UK Hydrogen Policy - Infrastructure and Industry Concerns.
[8] Atlantic Council. Transporting hydrogen: A global outlook on cross-border trade
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