1. Background: Why the Government Is Reassessing the Hydrogen Strategy
The UK’s original Hydrogen Strategy was published in 2021, setting ambitious goals for hydrogen production and a role for hydrogen in achieving the UK’s net-zero targets — including up to 10 GW of low carbon hydrogen production capacity by 2030. This was seen as a core component of the UK’s energy transition, alongside renewables, nuclear and carbon capture. (GOV.UK)
Since then, while some hydrogen projects have advanced, progress toward those early targets has been slower and more uncertain than anticipated.
In December 2025, analysts and observers noted that the government is now reassessing its hydrogen strategy ahead of a forthcoming updated policy — likely to be published before the end of this year — in order to better reflect the realities of the sector, investment conditions and technology readiness. (Clean Air Task Force)
2. What “Reassessment” Means in Practice
Policy Review & Strategic Recalibration
The government’s reassessment isn’t just minor tweaks — it aims to:
- Reevaluate the scale and role of hydrogen within the broader clean energy transition.
- Shift the focus toward “essential” or highest-value uses of hydrogen where it can deliver the most decarbonisation impact, such as hard-to-decarbonise industrial processes and certain transport sectors. (H2 View)
- Update policy levers, including subsidy frameworks, market supports, and transport or storage infrastructure planning.
What’s Still Pending
Key framework components — such as the Hydrogen Transport Business Model and hydrogen network and storage pathways — are still not finalised and are expected to be completed with the refreshed strategy and future policy documents in 2026. (Hydrogen UK)
This has already had real effects:
- Network developer Cadent paused its planning application for the HyNet hydrogen pipeline until policy clarity emerges, delaying project investment decisions. (Argus Media)
3. Why the Hydrogen Strategy Is Being Reassessed
Several developments pushed the government to rethink the approach:
Slower Deployment and Industry Uncertainty
Industry and investor confidence has been tempered by:
- Delays and scaling challenges in key low-carbon hydrogen projects.
- Uncertainty around funding allocations and subsidy mechanisms tied to future market models.
- Concern that too broad a role for hydrogen — spanning power, heat and transport simultaneously — dilutes focus from where it offers most value. (H2 View)
Risk of Lost Investment
Industry leaders and unions have warned that if policy ambition is narrowed too drastically, the UK risks losing significant private investment (potentially billions) and jobs to other countries with clearer hydrogen market signals. A coalition including the Hydrogen Energy Association and the GMB union wrote a letter raising these points during debate on the government’s direction. (The Times)
4. Key Stakeholder Comments & Positions
Industry Leaders
Hydrogen industry groups — including energy networks and labour unions — are advocating for:
- Maintaining broad hydrogen applications across sectors (e.g., chemicals, metals, transport and power).
- Clear pathways for subsidies and market supports that signal long-term commitment.
- Ensuring the UK does not fall behind European and other international hydrogen strategies. (H2 View)
Energy & Clean Tech Investors
Investors argue that policy clarity is essential for deployment decisions. Without it, major infrastructure and production projects hesitate or delay final investment decisions, as seen with hydrogen transport network plans. (Argus Media)
Government Position (Emerging)
Officials — including the Minister for Energy — have signalled a shift toward a more “focused, essential role” for hydrogen, emphasising where it provides maximum net-zero impact and economic value. However, the government has also sought to reassure stakeholders that it will continue to support hydrogen deployment and attract investment as part of its energy transition policy framework. (The Times)
5. Real-World Impacts & Case Examples
Hydrogen Infrastructure Projects
- HyNet’s hydrogen pipeline expansion has been postponed by developers pending clarity on the hydrogen transport business model, illustrating the link between policy timing and project delivery decisions. (Argus Media)
Hydrogen Allocation Support
The government’s previous allocation rounds have attracted private investment into low-carbon hydrogen production projects, helping the UK move closer to earlier targets — though some projects have withdrawn, and further rounds (e.g., HAR3) are expected to proceed once updated policy is formalised. (Hydrogen UK)
Experimentation & Sector Growth
Beyond infrastructure, hydrogen supply chain companies are monitoring the policy review closely as they plan future investment, workforce and scaling strategies — with the forthcoming State of the Hydrogen Nation report poised to highlight business sentiment and policy barriers early next year. (Hydrogen Energy Association)
6. Strategic Importance for UK Net Zero & Economic Policy
Hydrogen remains a strategic element of the UK’s net zero roadmap due to its potential to decarbonise:
- Hard-to-abate industries (steel, chemicals).
- Heavy transport segments where electrification is challenging.
- Energy storage and flexible power systems that balance renewable intermittency. (Royal Society)
However, how the government prioritises these roles — and hence where it directs subsidies, infrastructure support and regulatory frameworks — is central to whether the UK can sustain investment, foster industrial growth and meet climate targets.
Summary: What’s Happening Now
| Aspect | Current Status |
|---|---|
| Hydrogen Strategy Reassessment | Underway, with updated policy expected late 2025/early 2026. (Clean Air Task Force) |
| Policy Focus Shift | Toward essential and highest-impact hydrogen uses. (H2 View) |
| Industry Reaction | Calls for clarity and broad support to avoid losing investment. (The Times) |
| Project Impacts | Delays in transport infrastructure and investment timing. (Argus Media) |
| Net Zero Context | Hydrogen remains key to decarbonisation, particularly for hard-to-electrify sectors. (Royal Society) |
Here’s a detailed, case-study and comments-focused summary of how the UK Government is reassessing its Hydrogen Strategy ahead of a major policy update, what this reassessment means in practice, and key stakeholder reactions — including real examples from ongoing projects and sector responses.
1. Why the Reassessment Is Happening
The UK’s original Hydrogen Strategy (published in 2021) set out a roadmap for hydrogen to play a major role in the UK’s net-zero energy transition, including ambitious targets such as 10 GW of low-carbon hydrogen production by 2030. However:
- Progress toward these targets has slowed, with notable project withdrawals and market uncertainty around demand and policy support. (The Times)
- Government officials have signalled a shift toward a more “focused and essential” role for hydrogen, concentrating on sectors where it can deliver the greatest emissions reduction and economic impact — rather than broad deployment across all sectors. (The Times)
- A refresh of the hydrogen policy is expected before the end of 2025/early 2026 to clarify support mechanisms, demand signals, infrastructure policy and business models. (Hydrogen UK)
This reassessment reflects an effort to balance policy ambition with commercial viability and investor confidence.
2. Case Studies: How Policy and Market Reality Interact
Case Study A — Project Withdrawals and Market Signals
Several high-profile hydrogen projects have been suspended or cancelled, undermining confidence in policy consistency:
- ScottishPower pulled back from major green hydrogen projects at Whitelee and Cromarty. The company cited high costs, weak demand commitments and policy unpredictability as key reasons for withdrawal, even after securing subsidies. (Hydrogen Fuel News)
Implication: When flagship projects stall, investors reassess risk, making future capital commitments dependent on clear, long-term policy frameworks. This reinforces the need for a reassessment that offers predictable support mechanisms.
Case Study B — Government-Shortlisted Hydrogen Projects (HAR2)
In 2025, the government shortlisted 27 hydrogen production projects under the second Hydrogen Allocation Round (HAR2) — covering sectors like ammonia production, clean power generation, glass and brick manufacturing, and sustainable aviation fuels — showing ongoing commitment to diversifying hydrogen use. (REGlobal)
This highlights that:
- Despite strategic reassessment, pipeline development continues.
- There remains industry interest where policy signals and funding rounds give clear opportunity.
Case Study C — Innovation and Industrial Decarbonisation Support
Government programmes such as the Industrial Hydrogen Accelerator (part of the UK’s industrial innovation support) provided £26 million in grant funding to projects demonstrating full hydrogen systems across production and end-use — essential for proving real-world viability. (IDRIC)
Result:
- Helps de-risk early-stage technologies and provides practical evidence to support policy refinement.
3. Comments from Industry & Stakeholders
Industry & Trade Union Voices
Major hydrogen and energy sector bodies — including gas networks, hydrogen associations and trade unions — have publicly urged the government to retain broad hydrogen ambitions in the revised strategy, rather than narrowing to a narrow set of uses. They argue that:
- Restricting government backing to only “essential” uses could jeopardise future investment worth billions of pounds.
- Too limited a role risks losing industrial leadership and jobs to competitors in Europe and the U.S. (The Times)
These groups have also highlighted the need for strong market signals, consistent subsidy frameworks, and a twin-track approach supporting both hydrogen production and carbon capture-enabled routes. (Hydrogen UK)
Government Signals & Reassurances
While there has been talk of focusing hydrogen use on “essential sectors” (e.g., chemicals, metals, glass), government ministers have publicly denied plans to restrict hydrogen broadly, instead promising the upcoming refreshed strategy will:
- Promote clean energy growth,
- Attract private investment, and
- Support skilled jobs across regions. (The Times)
This suggests a policy balancing act between setting realistic expectations and sustaining investor confidence.
4. Policy Mechanisms in Focus
The hydrogen strategy refresh will likely influence several key areas:
Subsidy and Allocation Frameworks
- Future Hydrogen Allocation Rounds (HAR3 and HAR4) are expected to proceed, offering structured government support for viable projects. (Hydrogen UK)
Demand Signals & Cost Reduction
- Measures like Climate Change Levy exemptions for hydrogen electrolysis are planned to support production cost competitiveness by Spring 2026. (Hydrogen UK)
Infrastructure and Storage Development
- Projects like hydrogen storage and transport networks (e.g., salt cavern hydrogen storage schemes) are being advanced by companies as a response to policy signals, but they require clearer revenue models from government to reach investment decision stages. (ADVFN)
These developments underscore how policy refinement feeds directly into investor confidence and project delivery timelines.
5. Strategic Implications
The reassessment of the UK’s hydrogen policy comes at a crucial moment:
- The 10 GW production target by 2030 looks increasingly difficult under the current delivery pace, leading to a strategic pivot toward priority sectors where hydrogen offers the greatest value (e.g., heavy industry, chemicals). (The Times)
- Without clear policy and subsidy frameworks, the UK risks ceding ground to international competitors that are advancing hydrogen investment with more predictable support. (The Times)
- Mechanisms like electrolysis cost support and subsidy rounds are key to sustaining early-stage deployment and reducing long-term costs — helping the UK meet net-zero goals while growing a domestic hydrogen economy. (Hydrogen UK)
Summary Table
| Aspect | Status/Impact |
|---|---|
| Policy reassessment timing | Ongoing; refreshed strategy expected by late 2025/early 2026. (Hydrogen UK) |
| Industry reaction | Calls to retain broad ambitions; warnings about investment loss if restricted. (The Times) |
| Project realities | Mixed: some projects shortlisted and supported, some suspended due to cost/policy uncertainty. (REGlobal) |
| Support mechanisms evolving | New allocation rounds, tax exemptions and business innovation schemes underway. (Hydrogen UK) |
| Strategic tension | Balancing targeted, essential uses with broader industry growth and investor confidence. (The Times) |
🏁 Bottom Line
The UK government’s reassessment of its hydrogen strategy reflects real-world experience with project delivery, market demand, cost pressures and investor expectations. The coming updated strategy aims to clarify government support, focus hydrogen’s role where it delivers most value, and provide stronger confidence for long-term investment — while managing the risk that overly narrow targets could discourage private capital flows and slow the UK’s net-zero transition. (The Times)