Hydrogen industry in line for a slice of new multi-billion-dollar UK government cash pot

The hydrogen industry has been named one of eight “key” UK sectors that will benefit from a massive £4.5bn ($5.6bn) funding pot announced by the country’s government on Friday, with the aim of kickstarting economic growth and building supply chains.

Hydrogen has been grouped with five other energy-related sectors — carbon capture, utilisation and storage (CCUS), nuclear, offshore wind and power grids — to vie for a £960m chunk of the total funding amount.

But details are otherwise thin on the ground, with little indication of how much cash hydrogen industries will be eligible for, nor how the money will be distributed.

The biggest slice of the funding will be handed out to the UK’s automotive industries, which will receive £2bn to develop supply chains and manufacturing capability for zero-emissions vehicles, which could include hydrogen-powered vehicles but will most likely be dominated by battery-electric vehicles.

However, the government has also announced a plan to launch a “hydrogen industry taskforce”, delivered with private-public partnership Hydrogen Innovation Initiative and the UK’s research and development funding vehicle, Innovate UK.

The taskforce will “maximise investment opportunities for UK manufacturing of hydrogen propulsion systems”, said the Department of Energy Security and Net Zero (DESNZ), suggesting that factories making hydrogen fuel cell vehicles and hydrogen internal combustion engines (ICE) could be in line for funding under the scheme’s umbrella.

British construction vehicle giant JCB, whose chairman Anthony Bamford is a major donor to the ruling Conservative party, has already invested in hydrogen ICE manufacturing capability at its factory in Derbyshire, and says it has installed more than 70 such engines in its heavy machinery.

The UK also hosts Northern Ireland-based bus manufacturer Wrightbus, which began making investments in hydrogen propulsion technology since being bought out by H2 producer Ryze Hydrogen, owned by Jo Bamford, Anthony’s son and an heir to the billion-dollar JCB family fortune.

Bamford, who has strong links to H₂ political lobbying group Beyond 2050, is also executive committee chairman of hydrogen investor Hycap, which recently bought up ITM’s hydrogen refuelling business.

“Today we are announcing nearly £1bn to back our green industries,” said minister for energy security and net zero Claire Coutinho. “While we’ve already attracted £200 billion in low carbon investment since 2010, with another £100 billion expected by 2030, this will unlock even more.”

The other two sectors named as “key” are aerospace, which will benefit from a £975m sub-fund to develop, and life sciences, which has been granted £520m to build the UK’s resilience to future health emergencies, among other projects.