What does the CCC’s Progress Report say on hydrogen?

The Climate Change Committee (CCC) has now published its assessment of the UK's climate progress, uncovering "major failures" in delivery programmes towards the achievement of the UK's climate goals.

Releasing the report on 29 June, the CCC noted how last year it had praised the government for setting ambitious targets and launching a new Net Zero Strategy. With policies now in place for most sectors of the economy, it revealed that following a "thorough review of progress", it has uncovered "scant evidence" of delivery against the UK's headline goals thus far. It noted strong progress in the deployment of renewable electricity and electric cars, though cited energy efficiency in homes and agriculture and land use to be among the weakest areas.

Overall, it found the current strategy will not deliver net zero. While credible plans exist for a third of the UK's required emissions reductions to hit the Sixth Carbon Budget in the mid-2030s, and a further quarter can feasibly be reached, a third cannot be relied upon to deliver the necessary reductions. The government should look to develop contingency plans to deal with risks to delivery and make efforts to tackle skills gaps and potential planning consent barriers for infrastructure early.

Throughout the 600-page assessment, hydrogen features, most prominently in sections on fuel supply and manufacturing. The fuel supply chapter notes fossil fuel supply emissions have decreased 3% a year, on average, since 1990, though this has been driven primarily by the decline of activity in fossil fuel extraction, not active efforts to decarbonise the sector. It also identified risks to delivery in policies put forward in the Net Zero Strategy.

With the government ramping up ambition for hydrogen in the Energy Security Strategy - 10GW of production by 2030, up from 5GW, with at least half from electrolysers - it noted the future mix of hydrogen supply remains uncertain. Prospects for hydrogen from fossil fuel gas with carbon capture and storage (CCS), for example, are dependent on a relatively quick return to more moderate international gas prices. On green hydrogen, meanwhile, question marks remain as to whether it could fill the gap sufficiently by 2030 if blue hydrogen is unable to be delivered at scale.

Considering the nascent state of the hydrogen sector and the fact increasing demand for electrolysers in the UK will require an acceleration of the development of the electrolyser supply chain, strong government policy support is needed to provide additional funding, ensuring that mechanisms will be in place to deliver hydrogen production at both the necessary pace and scale. This is especially as market signals for investment will likely be weak while hydrogen demand is gradually established across different sectors.

Hydrogen also features in the CCC's chapter on buildings, where it highlights the steps being taken by the UK and devolved governments to evaluate the potential of hydrogen as an energy source for buildings. Up to £300mn has been committed until 2024 on various pilot programmes and innovation schemes for hydrogen, ahead of a decision being taken on its role in buildings by 2026, while it also noted work across the devolved nations, such as the Scottish government's Hydrogen Action Plan and ongoing support for H100 Fife.

It did also point out several recommendations made previously that have not been sufficiently addressed in the past year, including requirements for all new gas boilers to be hydrogen ready by 2025. This has not been put in place, despite the value of such an initiative being recognised within the Heat and Buildings Strategy.

As previously mentioned, manufacturing and construction is the other chapter where hydrogen features prominently, particularly when it comes to fuel switching. With manufacturing and construction sites contributing 14% of UK emissions in 2020, the government has increased its medium-term ambition with clear policy plans, though the CCC found these to be unlikely to deliver its ambition and also noted signs that delivery timelines are starting to slip.

On fuel switching, it outlined how government has consulted on its hydrogen business model which should help incentivise its production and, as a result, encourage use of hydrogen in manufacturing and construction. There will also be a need for additional supporting policies to ensure this. For example, it noted no clear plan for hydrogen infrastructure, especially for dispersed sites, while considering the government's intention to finalise its hydrogen business model in 2022 and allocate first support contracts for production projects reaching final investment decisions from 2023, further detail is lacking.

It went on to make a series of recommendations, stressing government must finalise the design of the hydrogen business model and Industrial Decarbonisation and Hydrogen Revenue Scheme in 2022, ensuring that the policy does not create an unlevel playing field for industrial electrification in the medium-term.

For a general overview of the CCC's Progress Report, visit Net Zero East.

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