UK Government Pledges $2.2 Billion to Scale Green Hydrogen Production

An initial allocation of £400 million is projected to generate 125 MW of green hydrogen


The UK government has unveiled a £2 billion (~$2.19 billion) government investment initiative to help expand green hydrogen production in the country, spanning from the Southwest of England to the Highlands over the next 15 years.

Over the next three years, an upfront allocation of ~£400 million (~$438.2 million) is projected to generate 125 MW of green hydrogen capacity, catering to diverse industries and furthering the progression of the country’s green economy.

The initiative aims to position the UK as a global frontrunner in the rapidly expanding hydrogen industry. During the initiative’s launch, Energy Security Secretary Claire Coutinho unveiled government support for 11 projects utilizing electrolysis to produce green hydrogen.

The move ensures a guaranteed price from the government for suppliers contributing to the clean energy sector, marking the largest simultaneous announcement of commercial-scale green hydrogen production projects in Europe.

Coutinho emphasized the economic opportunity presented by hydrogen, predicting up to £11 billion (~$12.05 billion) in investment by 2030.

The announcement represents a leap for the UK’s hydrogen economy, aligning with the government’s ambition to deploy up to 10 GW of low carbon production capacity by 2030.

A new second round of funding has been introduced, allowing producers to apply for support for their projects and further contribute to the industry’s growth.

Ministers have also outlined plans for future allocation rounds in 2025 and 2026, aiming to boost the green hydrogen capacity up to 1.5 GW across these rounds. Additionally, the government will fund projects facilitating up to 4 GW of Carbon Capture, Usage, and Storage (CCUS)-enabled, or blue hydrogen and 6 GW of green hydrogen by 2030.

Hydrogen blending, subject to safety assessments and final agreement, is also supported in certain scenarios.

While recognizing the potential role of hydrogen in home heating, the government has decided not to proceed with a hydrogen trial in Redcar, a town in England, due to the unavailability of the main hydrogen source.

The decision will be reevaluated in 2026 based on evidence from trials in Fife, Scotland, and similar European programs.

The collaboration between industry and government is seen as a crucial mechanism for progress in the early stages of the hydrogen economy.

Recently, the UK government pledged to provide £960 million (~$1.19 billion) for the Green Industries Growth Accelerator to support clean energy manufacturing. This investment is expected to enable the growth of strong, home-grown, clean energy supply chains across the UK, including carbon capture, utilization and storage, electricity networks, hydrogen, nuclear, and offshore wind.

The UK’s transformation to clean energy is expected to draw £100 billion (~$124.6 billion) in private investment and support the nation’s journey towards sustainable energy and job creation.