Sectors
Hydrogen
Funding model: Hydrogen Business Models
High-growth investment opportunities
The UK is a global leader in hydrogen innovation with abundant renewable resources, proximity to offshore CO₂ storage and existing oil and gas infrastructure. We also have internationally recognised expertise in engineering, construction, consultancy and gas infrastructure.
Areas of interest for investment include:
Production - electrolytic hydrogen production and carbon capture, usage and storage (CCUS)-enabled hydrogen production
Storage - surface bulk storage, subsurface storage and compressors
Distribution - pipelines and freight transport
Applications - power generation, heavy transport, feedstock for chemicals, industrial applications in key sectors including glass, steel, brickmaking, refining and ceramics
Services - engineering, construction management and commissioning
The UK hydrogen sector offers high-growth investment opportunities across a rapidly scaling value chain. Backed by strong government support, investors can capitalise on early entry into production, infrastructure and technology, positioning themselves in a market set for rapid expansion.
The government’s approach to developing the hydrogen sector will ensure the UK can unlock key investment opportunities across the whole value chain. Hydrogen is backed in the Industrial Strategy's Clean Energy Industries Sector Plan as a frontier technology, with a public finance offer designed to crowd private investment into UK supply chains.
The hydrogen production business model provides long-term revenue support to overcome cost gaps from low carbon hydrogen and conventional fossil fuel. Hydrogen Allocation Rounds (HARs) allocate government funding for these electrolytic hydrogen production projects, provide opportunity for developers to bid for financial support and give suppliers access to new demand.
The National Wealth Fund (NWF) has allocated £5.8 billion to clean energy initiatives, including green hydrogen, carbon capture and storage, ports, gigafactories and green steel.
The UK government is delivering real projects to kickstart the UK hydrogen economy, with 10 contract signings for successful projects from the first Hydrogen Allocation round, bringing jobs and investment across England, Scotland and Wales. HAR1 is expected to unlock around £400 million of private investment and create over 600 direct jobs. Future investment rounds will provide businesses with the certainty required to drive investment across the sector.
UK supply chain
Hydrogen is a priority area in The UK's Modern Industrial Strategy 2025, reflected in the Clean Energy Industries Sector Plan. The UK has supply chain investment opportunities in areas including electrolysers, electrolyser stacks, hydrogen piping and power electronics (like converts and inverters).
The government is committed to growing the UK's domestic supply chain, demonstrated through the recent £86.5 million funding package provided by Department for Energy Security and Net Zero (DESNZ) and Great British Energy for ITM Power’s 1 gigawatt (GW) Sheffield electrolyser manufacturing expansion.