Development of Hydrogen Supply Chain Hinges on Major Policy Changes: EIC

EIC highlights role of hydrogen as a clean energy as it participates in the UK’s first official Hydrogen Week, taking place on 13 -19 February.

London — The development of a robust hydrogen industry that helps to achieve net zero targets in the UK and elsewhere hinges on major policy changes that tackle issues related to hydrogen infrastructure, supply and demand dynamics, and financing needs, according to the Energy Industries Council, the world’s leading energy-agnostic trade association.

Speaking on the occasion of the UK’s first official Hydrogen Week – taking place on 13 -19 February 2023 – EIC Chief Executive Officer Stuart Broadley said the UK is among the world’s top countries in hydrogen with a robust supply chain active in manufacturing, development and beyond, but more needs to be done to build a long-standing, healthy hydrogen supply chain.

As of October 2022, the UK has 52 hydrogen production projects in planning or development, worth over USD$13.7 billion, EICDataStream shows. The UK is also home to some of the world’s major electrolysers manufacturing facilities, with ITM Power already producing 1000 units a year and planning to ramp up production to 5000.

We have seen today plans by for the UK to have hydrogen injected into the main gas pipeline by 2025. According to plans developed by National Gas, the owner of the pipelines, anything from 2% to 5% of the fuel circulating through the nation’s transmission network would be hydrogen in two years.

“The industry needs supply demand equilibrium to thrive and contribute to national and global environmental commitments,” Mr Broadley said. “Our research and industry conversations show that the global supply of hydrogen could exceed demand. If this trend continues, there is a risk that producers will have no buyers, risking a massive drop in H2 prices and long-term disruptions to the supply chain.”

He added: “We need to create demand opportunities immediately at industrial and retail levels. One way to do that is to give consumers the choice for hydrogen-fired vehicles by opening up hydrogen refuelling stations across the UK.

But we also need to secure funding to support hydrogen research and development efforts and the deployment of hydrogen production and distribution infrastructure. By prioritizing the development of UK content in hydrogen projects, the government can support the growth of local businesses, create jobs, build skills, and ensure that the UK is at the forefront of this rapidly evolving industry.”

The EU is also in keen discussion around hydrogen, and what constitutes ‘green hydrogen’. Today, the European Commission unveiled a system that permits hydrogen produced from electrical grids that contain significant amounts of nuclear electricity to be categorised as green if the producer has a long-term contract for renewable energy proportionate to its use.

All of this in the first UK Hydrogen Week.

Organised by the North West Hydrogen Alliance (NWHA), is an effort to bring the UK’s regions together in order to cement the country’s position as a world leader in hydrogen and capitalise on the enormous opportunity the sector offers for both reducing carbon emissions and driving green economic growth.

“To reach the planned 1.3 million metric tonnes or 10 gigawatts of hydrogen production capacity by 2030, the government needs to decide on the Track 2 industrial carbon capture and storage clusters and draw solid plans to achieve this target,” said Rebecca Groundwater, EIC’s Head of External Affairs. “To encourage businesses and investors to invest in hydrogen projects, we need a clear plan with deadlines. We also need to classify hydrogen internal combustion engine as a zero-emission powertrain (as the EU and other regions are doing) and support for hydrogen refuelling stations infrastructure to drive private investment.”

Many UK-based members of the EIC are active in hydrogen, delivering their services and expertise domestically and globally. EIC comprehensive databases provide critical data on hydrogen projects in the UK and around the globe as well as information on hydrogen suppliers, as part of EICSupplyMap. EIC has also recently released the Hydrogen EIC Insight Report, which tracks hydrogen projects around the globe and provides in-depth analyses on the current state and future developments of the hydrogen industry.

Professor Joe Howe, Chair of the NWHA and Executive Director, Energy Research Institute at the University of Chester, said: “The last few years have seen hydrogen rising in prominence in the net zero agenda. It’s now recognised as critical to delivering on our decarbonisation targets. While there are a number of regions that are already delivering on hydrogen projects, if we really want to capitalise on this huge opportunity the UK needs to collaborate.”

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EIC is a leading trade association for the energy industry, with a global membership of over 800 companies that cover the entire supply chain in oil and gas, power, nuclear, and renewables. Founded in 1943, EIC promotes the interest of its members by working closely with governments and key stakeholders. Through our London headquarters and regional offices in Dubai, Houston, Kuala Lumpur, and Rio de Janeiro, EIC members enjoy access to world-class products and services: EICDataStream is an unparalleled database of in-development energy projects worldwide. Our EICAssetMap provides comprehensive information on operating assets globally. EIC’s event solutions feature conferences, training courses, industry awards, and networking events. Our expert analysts and consultants are spread across four continents, producing insightful reports and bespoke market intelligence for member companies and outside clients.