The latest UK hydrogen transport industry policies and opportunities

Posted on: 16/02/2023

This article provides an update on the latest UK energy policies, hydrogen funding opportunities and public sector programmes taking place across the transport industry.

Hydrogen Policy and Targets

To achieve Net Zero in the Transport sector by 2050, we will have to move away from fossil fuels to sustainably produced electricity, ammonia and hydrogen fuels. In Innovate UK’s Transport Strategy, published in August 2021, it was stated: “Fossil fuels will still be the dominant energy vector in 2025, and even 2030. However, electricity will need to be the dominant vector by 2050 if we are to achieve net zero. We also expect hydrogen to be a significant vector for heavy goods vehicles, buses and aircraft by 2050.” With hydrogen being the first choice for larger scale vehicles, the UK’s hydrogen industry will rapidly develop and innovate in the coming decades.

The hydrogen supply chain can be broken down into six elements: production, conversion, storage, distribution, utilisation, and support services. The UK already has strong representation from these sectors of the hydrogen industry in all four UK nations.

The UK’s Hydrogen Strategy outlines both the foundations for a low carbon hydrogen economy as well as the innovation support required to stimulate investment and create a strong hydrogen sector in the UK. The UK has a ‘twin track’ approach with ‘green’ and ‘blue’ hydrogen production. Electrolytic ‘green’ hydrogen and Steam Methane Reforming (SMR) and carbon capture ‘blue’ hydrogen are both at the forefront of the strategy. In addition, other potential production routes may emerge as technologies develop. Blue hydrogen is a transitional solution until green hydrogen can be scaled up. The 10GW target for hydrogen production by 2030 has said that at least 50% of it must be green too. Green hydrogen will be scaled up in the years to come while blue hydrogen will be transitional.

In a December 2022 update, the government announced further hydrogen policy updates in addition to new funding for nuclear and hydrogen technologies. £25 million in funding was announced for innovative new technologies that will generate clean hydrogen from biomass and waste. Furthermore, the government seeks views on making domestic gas boilers hydrogen-ready from 2026 – preparing for a potential transition to hydrogen for heating. Government potentially intends to make a decision in 2026 on whether or not hydrogen for heating homes will be supported based on the trials that are taking place right now.

Innovate UK KTN has launched the Hydrogen Supply Chain Directory. This directory shares the details of collaborative organisations that are currently using or producing hydrogen or are proactively planning to. It also showcases solutions providers in the supply chain who can potentially help these end users meet their hydrogen targets. If you would like to meet an organisation listed in the directory, please contact the Hydrogen Economy Innovation Network team to arrange a meeting.


Hydrogen Public Sector Programmes and Pilots

The UK government is supporting the uptake of hydrogen in transport by providing funding, policy and advice across all public and private sectors. Recent examples of hydrogen applications stretch across many modes of transport – from aviation to shipping. Hydrogen is important for the decarbonisation of heavy modes of transport, but it could also have other uses where energy requirements, infrastructure constraints and refuelling times do not allow for other low carbon fuels. By investing in hydrogen use in transport in tandem with other technologies such as electric batteries, we can ensure we reach our transport net zero targets.


Hydrogen Opportunities

We can provide advice and support in applying for the hydrogen funding opportunities below. Please contact the Hydrogen Economy Innovation Network team to arrange a meeting.

Sustainable Aviation Fuel

The Advanced Aviation Fuels Fund, launched in 2022 supports the development of Sustainable Aviation Fuel (SAF) plants to kickstart a domestic industry. There is a £22 million fund specifically for technologies like power-to-liquids.

Guilt Free Flying

The Government and industry are investing £113 million in hydrogen and all-electric flight technologies to unlock guilt-free flight and support green jobs across the UK. This comes alongside a call for evidence for airport operations to be zero emissions by 2040.

Zero Emission Road Freight Demonstrators

The £200 million Zero Emission Road Freight programme seeks to demonstrate leading zero emission technology options in on-road operations in the UK, collecting evidence to influence and inform the rapid decarbonisation of the UK’s long haul HGV sector. The programme is focussed on the largest, most difficult to decarbonise, heavy goods vehicles – typically those weighing 40 to 44 tonnes. This 3 year programme was launched in 2022.

Tees Valley Hydrogen Transport Hub

The Tees Valley Hydrogen Transport Hub saw a £2.6 million investment in 2021, supporting seven trial projects in the region focused on transport. Phase 2 was launched in October 2022, with a further £20 million competition. The Hub focuses not just on transport technology, but also on local skills and pilot testing of hydrogen solutions across all areas of use.

Clean Maritime Demonstration Competition

The third round of the Clean Maritime Demonstration Competition was launched in September 2022. The funding is focused on technology and system demonstrations, hydrogen and hydrogen fuels were included in the £60 million scope. In the previous round of the competition, £12 million was allocated to 31 projects, 17 of which were hydrogen related.

Red Diesel Replacement Programme

As part of the £40 million Red Diesel Replacement Competition, there are several hydrogen projects which cover construction, mining, quarrying and dispensing of hydrogen. This competition is part of the end-use cohort in the Net Zero Innovation Portfolio which also includes the Industrial Hydrogen Accelerator Competition, the Industrial Fuel Switching 2 Competition and the Green Distilleries Competition.

Clean Hydrogen Partnership Horizon Europe

The European Commission’s Clean Hydrogen Partnership launched its hydrogen research call for proposals on 17 January 2023. A total of €195 million will be made available for projects in an unprecedented drive to support the creation of cutting-edge hydrogen technologies.

Regional Hydrogen Funding

In addition to the above funding supporting UK-wide projects, the government also supports the growth of the hydrogen industry in transport through schemes such as the £270 million Zero Emission Bus regional Areas Scheme. In Glasgow, a consortium named Hydrogen Vehicle Systems, which includes Strathclyde University, secured a £15 million grant from the government’s Advanced Propulsion Centre in December 2022 for hydrogen HGVs. In the year prior Glasgow City Council also secured £7 million for 20 hydrogen fuel cell refuse collections vehicles from the Automotive Transformation Fund. In Aberdeen, the city council secured an £8.3 million grant from the EU and Scottish government for a fleet of the world’s first hydrogen-powered double-deckers which have been running since 2020.

Future commitments from the government include funding announced in December 2022 through the Hydrogen BECCS Innovation Programme, of which Phase 2 will launch in 2023. Phase 2 will take forward the most promising projects from Phase 1. The government has also published research and analysis on Hydrogen Infrastructure Requirements up to 2035.

The widespread use of hydrogen will rapidly transform transport in the coming decades, the UK government is pioneering with policy, pilots and funding to ensure Net Zero 2050. The varied use of hydrogen across different transport modes and scales will create a pioneering hydrogen landscape in the UK.


Find out more

Explore the hydrogen landscape by browsing through the Hydrogen Supply Chain Directory which features collaborative hydrogen end users, producers, and solutions providers. The team has invested lots of energy into this resource so we would highly recommend discovering many of the key organisations within the hydrogen industry.


Contact Us

To discuss these energy policies and hydrogen transportation opportunities further, make sure to contact Eleanor Marshall, the Transport Infrastructure Knowledge Transfer Manager at Innovate UK KTN, or the Hydrogen Economy Innovation Network team.

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