Green Hydrogen – All Hot Air or a Sector that’s Ready to Balloon?


There’s been a buzz around green hydrogen for some time. It is an exciting technology because there are so many potential applications that will support the energy transition – everything from cement production, aluminium recycling, the pulp and paper industry, transport, mobility, power and storage have been mentioned as sectors that could use hydrogen to achieve decarbonisation goals.

To date, there have been barriers to green hydrogen getting off the ground, but in the last few weeks there have been some concrete advances towards green hydrogen being a serious proposition.

Current position

The majority of hydrogen is currently made by splitting it from methane gas, which generates high levels of CO2 as a by-product. Low carbon, or “green” hydrogen, is created by using electrolysis powered by renewable energy. At present, hydrogen is expensive to produce and electrolysers have historically been used on a small scale.

Innovation funding for UK demonstration projects

The UK Government recently announced a £90 million funding package to tackle emissions from heavy industry and homes as part of BEIS’s £500 million innovation fund. A large part of this package (circa £70 million) will be invested in low-carbon hydrogen projects and research. This includes £28 million for five demonstration phase projects which has been awarded though the government’s Hydrogen Supply Competition. A further £18.5 million of funding is being awarded to projects developing and trialling technologies to move industrial concrete and glass production away from fossil fuels and onto renewables.

Of the five demonstration phase projects awarded funding, the biggest award was given to a project led by ITM Power which aims to use electricity from Orsted’s Hornsea Two offshore wind farm to generate renewable hydrogen for the Phillips 66 Humber Refinery. The Dolphyn project led by Environmental Resources Management, which pairs floating wind turbines with integrated electrolysers, also received funding towards a 2MW prototype which it hopes to have in the water in 2023.

Shell’s hydrogen scheme

Another recent development is the announcement of the NortH2 project in the Netherlands by a consortium led by Shell. The plan includes proposals to develop a large offshore wind farm in the North Sea. Electricity from the wind farm would be used to power homes, but the scheme also includes plans for a large electrolyser and use of existing gas infrastructure in order to pipe the hydrogen generated to sell to industrial clients.

Feasibility studies have just begun, and the consortium has warned that the initial project phases may require support through subsidy.


There are still barriers to overcome before green hydrogen can be used at scale and on a commercial basis. However, as the pressures increase on governments to decarbonise industry and as more money is invested into developing hydrogen technologies, we should start to see cost reductions and larger-scale hydrogen projects being developed in the UK , Europe and elsewhere. It’s definitely an area to watch carefully as it seems to be an industry which is on the cusp of exciting advances.