Airbus and Tata Steel back push to spark green hydrogen strategy

Big multinational investors in Britain including Airbus and Tata Steel are backing a new group formed to bolster Britain’s drive to develop a globally competitive green hydrogen market.

Sky News has seen a copy of a letter to Grant Shapps, the energy security and net zero secretary, in which a body called the Green Hydrogen Alliance (GHA) said it could help “deliver significant investment and highly-skilled jobs to regions that need it most”.

The GHA’s other corporate founding members include Air Products, Associated British Ports and London City Airport, insiders said on Monday.

In its letter to Mr Shapps, which has also been sent to Ed Miliband, his Labour shadow, the group said that a comprehensive green hydrogen strategy could play a significant role in delivering Britain’s energy diversification and net zero objectives.

“The UK has unique strengths in the development of green hydrogen technologies, and the potential to be a pioneer of this emerging industry, bringing highly skilled jobs and sustainable economic growth to areas that need it most,” the letter said.

“Indeed, we welcome the progress made by the ‘Powering Up Britain’ strategy towards the realisation of a green hydrogen supply chain, specifically the announcement of the first projects shortlisted for the Net Zero Hydrogen Fund.

“This is an important first step towards creating a green hydrogen economy, and we hope to see this momentum continue in the full development of a resilient hydrogen market in the UK.”

The GHA said areas such as Port Talbot in South Wales – where Tata Steel’s vast steelworks is located – and the Humber Estuary were particularly well-placed to benefit from the creation of green hydrogen clusters.

One industry source referred to “an arms race” under way between the government and Labour to act as effective champions of the development of green hydrogen.

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Ministers have set out plans to produce 5GW of green hydrogen by 2030, while Sir Keir Starmer, the Labour leader, recently said a Labour government would seek to produce 10GW of green hydrogen within the same timeframe.

“The challenge facing both parties is the lack of a roadmap as to how exactly the UK will get there, especially given the US and EU subsidy schemes for green energy projects,” the industry source said.

The new alliance will focus on the use of ports and imported renewables which can then be converted into green hydrogen as a way of kickstarting a domestic hydrogen production market that can eventually focus on exports, they added.

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The timing of the GHA’s launch may also be seen as opportune because of ongoing criticism of the government’s approach to developing a green hydrogen market.

Speaking to the Financial Times last month, Andrew Forrest, the Australian mining tycoon, said the UK was “just sleepwalking” when it came to addressing the issue.

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A spokesperson for the Green Hydrogen Alliance said on Monday: “We welcome the government’s ambitious target of 5GW of electrolytic hydrogen production by 2030, but we must move further and faster on policy if we are to unlock the benefits green hydrogen will bring.”

The GHA’s secretariat function is being provided by WPI Strategy, a public affairs firm.

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