Why a Labour majority would be a good election result for the UK hydrogen industry

We published a special edition of HY NEWS last week to set out why Beyond2050 believes a majority Labour government would be a good election result for the UK hydrogen industry.?

The five years since the last General Election has been a hugely important period for the UK hydrogen industry. In 2019, the UK had no hydrogen strategy and political support for the industry was piecemeal.??

Huge progress has been made during this Parliament, with the launch of the Hydrogen Strategy in 2021, the Scottish Government’s Hydrogen Action Plan in 2022, the launch of the HAR scheme and the passing of the Energy Bill to give the Government several key, enabling powers. UK hydrogen projects have attracted millions in investment, and work has begun on moving from plans to getting spades in the ground.?

Beyond2050 would like to, once again, put on record our thanks and congratulations to the officials working in Whitehall to make that happen, and to Claire Coutinho for her work since she became Secretary of State last year, as there was a noticeable increase in political support for hydrogen after she took office.?

Since Beyond2050 was founded in April 2020, we have believed in the importance of politicians and political decision for shaping the UK’s hydrogen market.?

Looking to the future, as we said in our election briefing session last Thursday, our view is that a good election result for the UK hydrogen industry is a sizeable Labour majority.??

Hydrogen does not always look the best option on a spreadsheet – it can be more difficult, less efficient, and cost more than other options for decarbonisation.??

But hydrogen also has huge potential to create tens of thousands of good jobs and generate billions in economic activity across all parts of the UK for generations to come. To realise these benefits, political decisions at ministerial, MP, Mayoral and council levels are all required.??

Based on analysis of party manifestos that we shared in previous editions of HY NEWS, Beyond2050’s view is that it is Labour who have the clearest and most ambitious plans for hydrogen for the five years ahead.??

Sir Keir Starmer, the Labour Leader, said in his 2022 Conference Speech, “Some nation will be the first to harness hydrogen power. Why not Britain?”, while Shadow Chancellor Rachel Reeves told the GMB congress in 2021 that she is “A massive fan of hydrogen”. The Labour manifesto builds on this ambition with policy detail to underpin the rhetoric.?

Labour’s vision sees hydrogen green production scaling up to 10GW by 2030 “for use particularly in flexible power generation, storage, and industry like green steel”. This will be delivered with support from a National Wealth Fund (NWF) and GB Energy, which will both have hydrogen among their priority areas. Within the NWF will be a ￡500m green hydrogen manufacturing fund, which Beyond2050 sees as an evolution of the GIGA fund the Government was in the process of designing before the election was called (and was included in the Conservative manifesto).?

Following next week’s election, Labour could hold power in Whitehall and in 10 of the 11 directly elected mayoralties and will be the largest party in local government in England. They lead the Welsh Government, and some polling suggests they could win the Scottish Parliament elections in 2026.??

A sizeable Labour majority in the Commons would therefore be welcome news for the UK hydrogen industry. Labour has promised to “back the builders, not the blockers”, and is promising major action within days, including an Energy Independence Bill in the King’s Speech on 17 July.?Big, bold decisions are required to accelerate the UK hydrogen sector over the coming years, and these will have a determining factor in the long-term role we play in the global hydrogen market. These decisions will be easier to sign off in Whitehall and work through Parliament, and then drive forward at a local level, if there are united, and stable, political positions.??

The stability will also be much welcomed by investors, who are of course critical. Over the past few years, the Government has successfully courted investors into the UK hydrogen sector, evidenced by the large volumes of HAR2 applications. Labour’s target is to attract ￡3 in private investment for every ￡1 of public support, which is a laudable aim.??

To help deliver this within hydrogen, an incoming Labour government should issue an early signal of commitment to the original HAR2 shortlist timeline, and get out of the door all the policy documents and consultations, such as on the hydrogen levy, that DESNZ officials we preparing to publish before the PM called the election. Following this, we urge early decisions on areas such as transport and storage, transmission level blending, future HAR flexibility over issues such as risk-taking intermediaries and a more defined long-term strategy for demand for hydrogen, including across all of transport.??

There will be no edition of HY NEWS on Friday. Instead, we’ll publish an edition early the following week with analysis of first steps taken by the new Government, as well as insight into the Cabinet appointments.