The UK is among the largest potential European hydrogen markets, but a lack of support for technology manufacturers risks it missing out, according to a new report by Hydrogen UK.
With a strong track record of attracting foreign direct investment (FDI), a firm network of project developers and potential offtakers, the UK has a “unique” opportunity to lead the hydrogen supply chain market, the trade body has said.
However, the nation must invest in technology and supply chains as well as projects to deliver the potential benefits.
“The UK lacks a critical mass of OEM / Tier 1 capability and struggles with assisting companies through the pre-commercialisation ‘valley of death’,” the report reads. “UK government support mechanisms are still not as advanced or holistic as competitor regions.”
It also said that the UK responds slowly and misses out on key investment decisions, preventing it from being a “world leader in hydrogen technologies and manufacturing.”
Citing more effective support in competitor regions, supply chain bottlenecks, a lack of skilled workforce, low-cost import opportunities, and a lack of testing, as threats, Hydrogen UK noted that a “short window of opportunity exists” to turn the tide.
It calls on the government to use future funding across the value chain; facilitate stronger links between project developers, offtakers and supply chain firms; and use the UK’s R&D capabilities and FDI track record to attract companies.
Highlighting electrolyser stacks, power electronic, hydrogen pipes and compressors and “quick wins” in the supply chain, Hydrogen UK CEO, Clare Jackson, said, “By strategically investing in our supply chain and workforce, we can not only lead globally but also create thousands of jobs and drive significant economic growth.”
Among its recommendations, the report suggests government should adjust its Hydrogen Production Business Model, currently aimed at scaling production” to encourage developers towards UK supply chains.
It also said a central supply chains support and funding body should be set up to overcome the “fragmented and insufficient” support that is currently offered.
Sarah Jones, UK Minister for Industry, said she would consider the findings “carefully.”
“We’re ready to work with industry to seize this opportunity and by targeting strategic areas of the supply chain, drive a new era of growth and innovation,” she added.
It comes just two months into Labour’s tenure in government. In its election campaign, the party had committed £500m ($652.8m) to support the development of the UK’s green hydrogen sector.
Read more: £500m dedicated to green hydrogen under Labour Party manifesto
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