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Hydrogen – producing the future?

On 17 August 2021, the UK Government presented its Hydrogen Strategy (the “Strategy”) to Parliament. The 120-page document set out the Government’s ambition to develop a thriving hydrogen sector in the UK and to place it at the forefront of hydrogen technology. What does it say and how might hydrogen feature in the future?

Throughout this article, we will be referring to different colours of hydrogen (primarily blue and green). To assist, we have produced a short guide to the hydrogen rainbow here.

Building the hydrogen economy

The Strategy sets out a staged development of the UK’s hydrogen economy:

  • 2021 – 2030: the UK will develop its capabilities for producing blue and green hydrogen to hit its target of 5GW of production.
  • 2030 – 2035: the UK will start to see larger production facilities come online. The type of projects will depend on industry investment, so they may be green, blue or a mix of other colours depending on confidence in the technologies and industry investment. The Strategy anticipates that the first large scale green hydrogen production will come online around this time.
  • 2035 – 2050: the UK will rapidly expand its hydrogen production. This may include the introduction of quantities of pink hydrogen, particularly if we see the construction of fourth generation nuclear reactors.

To achieve the most cost-efficient expansion of hydrogen production in the short term, the UK Government’s intention is to use a mix of blue and green hydrogen. This has significant immediate advantages as the technology used to produce blue hydrogen is readily available, does not require a significant increase in carbon free energy production and is cheaper than green hydrogen. This should allow the UK to rapidly increase its hydrogen production capability over the next 5 – 10 years.

However, as the Strategy confirms, the technologies used to produce green hydrogen are rapidly becoming cheaper. As this technology becomes more mainstream, costs will decrease faster. The Strategy suggests that green hydrogen could become cost-competitive with blue hydrogen as early as 2025.


The Strategy is an important step towards developing a flourishing hydrogen economy within the UK. Its stated aim of having 5GW of low carbon hydrogen production by 2030 may be a good start, however, this needs to be seen in context.

One critical point is that not all of the hydrogen produced in the UK will be green hydrogen. In fact, in the short to middle term the majority will be blue. This has been confirmed by Equinor’s announcement that it plans to produce 1.8GW of blue hydrogen in the UK by 2030, with two of its partners producing at least a further 0.7GW in the same period. Therefore, while the hydrogen produced in the UK will be low carbon, it will not be zero carbon.

We can also take a crude look at how the UK might compare to its neighbours. The UK’s stated aim of 5GW of production would account for less than 5% of the UK’s energy consumption. The Strategy suggests that hydrogen production will steadily increase so that it accounts for between 20% and 35% of the UK’s energy consumption by 2050.

Ignoring any increase in consumption requirements, to reach the suggested lower and upper ranges for energy consumption, the UK would need:

  • 10 – 20GW of production capability by 2035.
  • 15 – 30GW of production capability by 2040.
  • 30 – 50GW of production capability by 2050.

Based upon current proposals alone (which it is accepted will not all come to pass), by 2040 the world’s production of green hydrogen will exceed 210GW and may be as high as 250GW. Some 85% of this capability is proposed in Europe, with 23% in Germany. If all of these projects were to be built, then Germany could be producing as much as 50GW of green hydrogen by 2040, while the UK might produce half that amount, with a large part of that being blue hydrogen.

So, why is the UK looking to blue hydrogen? In practice, the infrastructure is simply not there at the moment to support the required rate of green hydrogen expansion. Blue hydrogen, while not a perfect solution, can act as a stop gap, subject to appropriate maximum carbon emissions from the process, allowing the UK to add 20% hydrogen to its gas supplies, along with other initiatives. The UK is also well equipped to store carbon dioxide, either in salt caves or former deep oil fields (see for example the Acorns CCS scheme in Scotland). This quick initial growth in the sector may in turn lead to faster development of hydrogen reliant technologies, making the economy more reliant on hydrogen and in turn push the development of renewables and green hydrogen.

There are, however, two key parts to this plan:

  • Being ready and willing to move to green hydrogen as it becomes cheaper and more available, otherwise we risk being left behind as companies preferentially purchase green hydrogen over blue.
  • Setting the level of carbon emissions from blue hydrogen at an appropriate, and very low, level.


This information is for educational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. © Shoosmiths LLP 2022.


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