Trade organisation Hydrogen UK on 15 July launched a new report, ‘Driving Demand’, said to be a pragmatic and experience-based intervention into the UK’s decarbonisation and industrial strategy. The report’s purpose is to dispel the myth that hydrogen is a silver bullet for every climate challenge, and instead makes the case for targeted, strategic deployment in hard-to-electrify sectors that urgently need a viable alternative to fossil fuels.
With over £20 billion in private investment ready for deployment, the report warns that the UK risks falling behind unless action is taken to stimulate hydrogen demand, matching the policy effort already invested in production. “We don’t need hydrogen everywhere. But where we do need it, we need it badly,” said Clare Jackson, CEO of Hydrogen UK. “This report is a call to get serious about demand. We’ve done a great job kickstarting production but now we need to consider the perspective of those that are going to be using hydrogen.”
The report identifies the sectors where hydrogen is not just useful but essential. These include power generation and seasonal energy storage, for grid resilience and asan alternative to diesel and HVO off-grid; foundational industries like chemicals, steel, refining, ceramics, cement, and glass, where conditions make electrification infeasible; heavy transport and shipping, where battery range and refuelling times are impractical; and aviation, through sustainable fuels made from hydrogen and CO₂.
Despite growing interest from offtakers, the report identifies four persistent barriers, namely economic considerations such as long-term contracts, high upfront costs, and insufficient carbon pricing disincentivise investment; policy uncertainty; infrastructure gaps, eg lack of hydrogen transport and storage; and technology readiness; businesses are willing but want to see hydrogen working in real-world conditions.
To break the stalemate ‘Driving Demand’ calls on the UK government to:
- Publish a refreshed Hydrogen Strategy that places offtakers at the heart;
- Introduce industrial and transport demand-side incentives, including DEVEX and CAPEX support;
- Prioritise hydrogen infrastructure, including pipelines, refuelling stations, and storage;
- Stimulate market creation through low-carbon product standards for eg steel, concrete and cement) and use the weight of public procurement to create guaranteed demand.
Support a technology-neutral approach, letting businesses choose between electrification and hydrogen based on site-specific needs.
“The era of hydrogen as a catch-all solution is over,” said Jackson. “But for heavy industry, freight, shipping, power and storage, hydrogen isn’t a ‘nice to have’, it’s mission critical. We now need smart policy to turn plans into reality.”
