Regen responds to the UK Hydrogen Strategy consultations

Some of the key recommendations explored in the responses are summarised below.

Low carbon hydrogen standard:

• The threshold for defining the carbon intensity of ‘low carbon’ hydrogen should be set at a level that is consistent with meeting the UK’s net zero emissions targets.
• Following the CCC’s recommendations for the Sixth Carbon Budget, a threshold of c.4 – 7 gCO2e/MJ (equivalently 14 – 25 gCO2e/kWh) would ensure hydrogen production makes a direct contribution to the UK’s carbon reduction targets and is aligned with a net zero outcome.
• The standard should include upstream lifecycle emissions from the production and supply of feedstocks, as well as at point of production.
• Regen does not agree that there is a need to allow a lesser standard in the near term; however, if this is the case, there should be a clearly defined timescale to achieve
  the net zero standard which all producers must commit to.
• There should be no “grandfathering” allowance for producers to continue to operate on a lesser standard.
• Producers should be encouraged to source electricity directly from renewable sources where possible, either directly or via power purchase agreements. However, they could be allowed to trade REGOs in the near term, to bridge the gap until renewable electricity is more widely available and the carbon intensity of the grid has decreased

Hydrogen business models:

• A narrow focus on production capacity may miss the wider hydrogen opportunity.
• A twin track, technology agnostic, approach is misplaced as it risks locking the UK into a long-term dependency on fossil gas imports.
• There should be increased support for green hydrogen as it is consistent with the UK’s decarbonisation targets and is a better fit with a future net zero energy system.
• The business model design must encourage innovation and new entrants and not become dominated by inefficient producers.
• There should be a focus on developing higher value demand markets.
• The business model should target a rapid replacement of grey hydrogen.
• Determining the strike price requires careful consideration.
• The question of blending needs to be addressed and should not be used as a production incentive.