16:42 Jacob Young (Redcar) (Con)

It is a pleasure to serve under your chairmanship, Sir Edward. Hydrogen is the most abundant element on Earth. The word “hydrogen” derives from “hydro”, meaning water, and “gene”, meaning producing, which is apt, as the product of burning hydrogen in oxygen is pure water. As I will go on to explain, in an era when we are ever more conscious of our carbon emissions and greenhouse gases, hydrogen provides a solution.

The purpose of this debate is, first, to take us on a journey back to the future—we do not need a DeLorean unless it is hydrogen powered—because just as hydrogen is a fuel of the past, it will be a fuel of the future, too. The three primary areas that I want to touch on today are hydrogen for heating our homes, in transportation and freight, and its use in the decarbonisation of industry. This is where I make a link from past to future. For decades, we heated our homes with town gas, containing more than 50% hydrogen; hydrogen was used to power engines throughout the 19th and 20th centuries; and hydrogen, as a by-product in many industrial processes, has been used as a fuel in furnaces since the beginning of the industrial revolution. In recent times, we have turned our gaze to what were once thought to be cleaner and safer fuels, such as methane, and to fuels that have always been easier, such as petrol and diesel, but we know that we cannot go on like this.

The global challenges that we face in relation to climate change and tackling carbon emissions are well worn arguments that I do not intend to go over today. To achieve net zero, we have to realise the hydrogen economy, and even the Government’s own analysis sees 20% to 35% of UK energy consumption being hydrogen based by 2050. To get to that point, a range of vital steps need to be taken to recognise the potential of hydrogen as an innovative solution to our problems, as it was in the past, while realising that technological improvement, increased safety, innovation and popular support make this element even more beneficial than it was before.

An easy first step to take is to ensure that we have the right regulatory regime to support a future hydrogen economy. We must make changes to the gas safety management regulations to allow hydrogen to be blended within the gas network up to 20%. That has already been proven to be safe through programmes such as HyDeploy and the ongoing blend at Winlaton in Gateshead. By blending in 20% hydrogen within the gas network, we can immediately begin decarbonising our gas network, with no impact on consumers and minimal impact on the network, but with a high impact on our emission savings—an estimated 6% saving in heat alone.

The final key point that I would like to address is the role that hydrogen can play in decarbonising industry if we provide the storage and distribution networks required to meet its ambitions. I was so pleased to see the Government double their hydrogen targets to 10 gigawatts by 2030, and we in Teesside stand ready to produce a significant portion of that through investments from BP, Kellas Midstream and EDF. There is no use in producing all that hydrogen if it has nowhere to go, however, which is why Project Union—National Grid’s endeavour to create a hydrogen backbone that spans the UK, hopefully starting in Teesside and linking to Humberside—is so important.

We can realise his vision through nurturing innovative and pioneering partnerships between Government and industry to help us to harness the fuel of the future, achieve net zero and build a future hydrogen economy.

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16:50 Christian Matheson (City of Chester) (Lab)

The HyNet North West scheme, which I support, has been demand-driven by big industry in our region. Incidentally, one reason for that is that it differentiates companies for their customers. I have heard about one manufacturer, whose customers are looking to ensure that their supply chain is greened and becomes net zero, taking us forward in that aim. Anything that can reduce the industry’s carbon footprint—even a step towards that aim—should be welcomed.

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16:57 Peter Aldous (Waveney) (Con)

The Government have adopted a cluster approach to the promotion of the hydrogen economy. I fully understand the rationale for doing so, but the regulatory framework must be sufficiently flexible, so that more decentralised areas, such as the east of England, are able to realise their full potential. That way, we can not only more readily realise our decarbonisation goals but create new and exciting jobs.

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17:05 Darren Henry (Broxtowe) (Con)

In February 2022, the midlands engine set out its hydrogen technologies strategy, which draws on the exceptional manufacturing capabilities in the midlands and the immense potential to expand renewable energy production within the region. Expanding the hydrogen economy of the midlands will act as a catalyst for driving economic growth and new job markets in the region. The midlands has always led on manufacturing and has the infrastructure in place to be a world leader in hydrogen production. It is essential that that potential is not wasted.

The potential benefits on offer include the opportunity to create 85,000 jobs through production, supply and storage of hydrogen, more than 60,000 jobs through the decarbonisation of heavy goods vehicles and refuelling infrastructure and almost 2,000 jobs supporting the use of hydrogen as an alternative aviation fuel, all with the potential to contribute £10 billion gross value added to the midlands economy. The midlands plan for hydrogen goes as far as to set out industries in which there is potential to create more job and apprenticeship opportunities, such as domestic and commercial heating, low-carbon energy generation, public transport, freight, logistics and construction equipment.

There are already some fantastic businesses in the midlands, working to put the UK on the map for hydrogen production. One such business is GeoPura in the east midlands, which I have been lucky enough to visit in my capacity as co-chair of the all-party parliamentary group. GeoPura uses renewable energy, usually solar PV or wind, to create hydrogen and, in turn, hydrogen-based zero-emission fuels. That is then transported to areas where a local generator converts it into electrical power. From start to finish, the process is completely clean and carbon-free and the only by-product from the process is water. GeoPura energy is currently being used in transport, construction, film and television, as well as outdoor events such as festivals. Businesses such as that in the midlands have the potential to ensure that the UK leads in hydrogen technology and production.

I will conclude today by saying that the Government have made it clear that in order to achieve net zero by 2050, we must ensure that we are leading on the low-carbon hydrogen technologies front. Industrial heartlands such as the midlands are ready to be at the forefront of the hydrogen economy and ensure that the UK continues to take a global lead on the green industrial revolution that we hope for.

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17:09 Jim Shannon (DUP)

It is always a pleasure to speak in Westminster Hall, no matter what. I congratulate the hon. Member for Redcar (Jacob Young) on setting the scene so very well and giving us all the opportunity to participate by doing that. The thrust of my contribution will be to insist—in a gentle, nice way—that Northern Ireland should be very much a part of the planned future hydrogen strategy. I am ever mindful of the Government’s legally binding targets under the Climate Change Act 2008, and the fact that the Climate Change Committee’s 2018 report, “Hydrogen in a low-carbon economy”, found hydrogen to be a credible option. The Government have committed themselves very much to the net zero target and to ensuring that hydrogen is an energy opportunity that we can all take advantage of.

The hydrogen strategy set out a number of things that should happen to expand domestic hydrogen production. They include setting aside £240 million for the net zero hydrogen fund, the significant development and scale-up of hydrogen network and storage infra-structure, with a £68 million commitment, and scaling up the use of low-carbon hydrogen, with heating buildings and transport trials and pilot projects planned—the hon. Member for Redcar (Jacob Young) referred to that. The strategy also talks about a market framework for hydrogen and a “supportive regulatory framework”. Northern Ireland wants to be part of that hydrogen plan, Minister. I know from the answers that he has given to me in the past, and also to my hon. Friend the Member for North Antrim (Ian Paisley), that he is committed to that, but it would be nice to have it in Hansard .

“£100 million of new funding for the net zero innovation portfolio”. —[ Official Report , 13 January 2022; Vol. 706, c. 630.]

To conclude, “The Path to Net Zero Energy”, published in December, has set long-term sustainability targets for the region’s energy sector, including plans to fully decarbonise by 2050. Cost is also a key focus in the plan, in order to increase the affordability of low-carbon forms of energy. Other targets include the delivery of energy savings of 25% from buildings and industry by 2030, as well as doubling the size of Northern Ireland’s low-carbon and renewable energy economy.

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17:14 Andy Carter (Warrington South) (Con)

Our net zero target and the private sector’s environmental commitment have led to significant demand from industry to invest in green transition. That is really good news, but the current caps on the support contracts under the industrial decarbonisation and hydrogen revenue support scheme fall substantially short of the level of demand from industry and below that required to achieve net zero. Without a significant increase in those caps, there is a danger that hydrogen deployment will not deliver the initial scale required to gain the momentum that this fledging sector needs, potentially losing the global lead we have already made in the UK in the hydrogen economy.

The current target of about 6 million tonnes per annum for industrial carbon capture by 2030 is part of the overall target of 20 million to 30 million tonnes per annum. However, it is narrowed down to about 3 million tonnes per annum for the initial allocation under the industrial decarbonisation scheme, and that is an inadequate target to kick-start a new industry. If we split that evenly between HyNet and the East Coast Cluster, it would potentially only allow for one or two of HyNet’s flagship projects to be delivered, resulting in organisations being unable to decarbonise their industrial processes. We need to go bigger.

The message to the Government is really clear: the private sector that is investing in this area wants to proceed and is keen to expand the operation, but it would like Government support to do that. Will the Minister confirm that his Department has done a proper assessment of the impact that the current plans may have on companies reliant on HyNet hydrogen production and infrastructure to decarbonise? Does it leave them facing increased risks and uncertainty from the impact of carbon cost and market share?

I recognise the importance of moving towards decarbonisation and I know that the Government are committed to ensuring that we have the tools in place to achieve net zero by 2050, but it is ambitious projects such as HyNet, bringing together businesses, creating jobs and bringing investment, that pave the way for achieving our target. It is critical that we listen to the needs of those working in the sector to make sure we get this right. I urge the Minister to take heed of the challenges HyNet is currently facing and to seek to resolve them as soon as possible.

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17:19 Stephen Flynn (SNP)

A key question that has perhaps not been touched on in enough detail in the debate is that of blue or green hydrogen. The hon. Member for Birkenhead (Mick Whitley) made the excellent point about CCUS—or the lack of it—in the north-east of Scotland. He is absolutely right: the Government’s completely illogical decision not to progress with the Acorn project causes us a great deal of consternation, given the potential of CCUS. Key to the Acorn project is the production of blue hydrogen, but as we move forward, that discussion changes. Will it still be possible to have a blue hydrogen economy in the same way when the green hydrogen economy is building up at such a pace? In Scotland, the capacity for 25 GW of offshore wind is being built, so the potential for green hydrogen is enormous.

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17:30 The Minister for Energy, Clean Growth and Climate Change (Greg Hands)

This Government recognise that now, more than ever, we must focus on generating cheaper, cleaner power in Britain to support our long-term energy security and to achieve net zero by 2050. Hydrogen has the potential to help decarbonise vital UK industry sectors and to provide flexible energy across power, transport and, potentially, heat. Our drive for renewables makes hydrogen especially valuable. Excess renewable electricity can be used to produce hydrogen, which can be stored over time and used to generate electricity when there is less sun or wind to power the grid.

The enormous potential of hydrogen for our economy is plain to see. In the UK alone, the sector could support 12,000 jobs by 2030 and unlock over £9 billion in private investment in the UK. By 2050—net zero date—the UK’s hydrogen economy could be worth up to £13 billion and support up to 100,000 jobs, many of which will be in our industrial heartlands.

This is a very friendly intervention. For the record, will the Minister state the importance of the role hydrogen will play in industrial decarbonisation, particularly in industries such as steel, ceramics and cement? I am sure he will want to put that into the mix, as it were, as far as the deployment of hydrogen is concerned.

The hon. Gentleman is absolutely right about the importance of industrial decarbonisation. That is one reason why we are following the cluster approach, to make sure that those hard to decarbonise industry sectors are close to those clusters.

I will group my response to the two contributions from the HyNet group—the hon. Member for City of Chester (Christian Matheson) and my hon. Friend the Member for Warrington South (Andy Carter)—if I may call them that. The hon. Member for City of Chester also mentioned powered aircraft and maritime, which are very much in the mix for using hydrogen for transport. I had an excellent visit to the constituency of my hon. Friend the Member for Warrington South towards the end of last year, when I saw the potential for the Novelis canning factory to use hydrogen and other means. I have just come from meeting my co-chair of the green jobs delivery group to make sure that the skills are there. On the caps and the impact on companies in the HyNet process, my Department is in regular contact with major cluster projects, including HyNet, about how the Government and the industry can work together to realise our 10 GW ambition as part of the CCUS cluster sequencing process. I am happy to write to my hon. Friend with further details about the companies in HyNet.

My hon. Friend the Member for Waveney (Peter Aldous), who is a passionate supporter of green energy right the way across the board, told us about the clean hydrogen cluster in East Anglia and the Lowestoft power plant project using hydrogen for municipal buses and the refuse fleet, which was also mentioned by the hon. Member for Aberdeen South (Stephen Flynn). On one of my many visits to Scotland, I was really excited to see the Whitelee wind farm just south of Glasgow, which is the second largest onshore wind farm anywhere in Europe. Last autumn, we launched a £9.4 million project with Scottish Power to take the excess onshore wind power generated at Whitelee and turn it into hydrogen for Glasgow’s buses and refuse carts—similar to the scheme mentioned by the hon. Member. By the way, I am looking forward to being in Aberdeen again this week for the fourth time in my nine months as Energy Minister.

In the brief time available, I will outline the next steps. We recently published a hydrogen investment package, which set out the key policy detail that industry has been waiting for, and paved the way for the launch of two significant funding mechanisms: the net zero hydrogen fund, and our hydrogen business model. The net zero hydrogen fund will be coming this summer, and we aim to run annual allocation rounds for electrolytic hydrogen as soon as legislation and market conditions allow, moving to price-competitive allocation by 2025. In July, we will announce the blue hydrogen projects that we will negotiate with the CCUS cluster sequencing process.

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