The UK hydrogen strategy faces a necessary reset, with growing evidence that focusing on hydrogen demand — rather than headline production targets — will determine whether the sector delivers meaningful decarbonisation or costly missteps.
As argued in a recent briefing by Green Alliance, the UK government’s forthcoming Hydrogen Strategy presents a timely opportunity to reset policy away from production targets and towards hydrogen demand and prioritisation.
The government’s original 2021 strategy focused heavily on scaling low-carbon hydrogen supply, with ambitions of 10GW by 2030. Five years on, however, much of the early hydrogen hype has faded.
Evidence now shows that direct electrification is cheaper, more efficient and lower-risk for most sectors, while hydrogen should be reserved for applications where alternatives are limited or unavailable.
The briefing argues that continuing a supply-led approach risks misallocating public funding into projects with weak or inefficient end uses — including transport and domestic heating — while failing to build viable demand where hydrogen is genuinely needed.
Several hydrogen projects have already been delayed or scrapped due to insufficient demand signals. Instead, the authors call for a hydrogen use hierarchy, prioritising sectors such as chemicals, aviation fuels, shipping (via green ammonia), primary steelmaking, long-duration energy storage and certain high-temperature industrial processes.
These sectors are expected to drive the majority of future hydrogen demand and are better suited to managing hydrogen safely and efficiently.
The paper also highlights hydrogen leakage as an under-addressed climate risk. Due to hydrogen’s small molecular size, leakage during production, transport and use is difficult to detect, and high leakage rates could undermine hydrogen’s climate benefits — potentially making it worse than natural gas in extreme cases.
To address these risks, Green Alliance recommends that the government:
