Hydrogen and Fuel Cell Industry

Lord Wilson of Sedgefield Excerpts

Wednesday 19th November 2025 Lords Chamber

[Baroness Walmsley]

To ask His Majesty’s Government what measures they are taking to promote the hydrogen and fuel cell industry in the United Kingdom.

[Lord in Waiting/Government Whip (Lord Wilson of Sedgefield) (Lab)]

The Clean Energy Industries Sector Plan sets out a clear plan to boost growth in the UK hydrogen industry, including: deployment certainty for future hydrogen allocation rounds; launching the first transport and storage allocation round in hydrogen to power our business model next year; exploring options to expand the clear industry bonus of hydrogen; delivering events connecting developers with suppliers; and a comprehensive public financial institution offering, including the £1 billion Great British Energy supply chain.

[Baroness Walmsley (LD)]

I thank the Minister for his Answer. I welcome the 27 projects that have been shortlisted under hydrogen allocation round 2. I hope that they are as successful as the 10 of the 11 projects in hydrogen allocation round 1 that now have contracts enabling them to move to the construction phase. Can the Minister confirm what steps the Government are taking to increase the levels of UK-made technology used in both hydrogen allocation round projects to ensure that they do not have to buy it in from abroad and that it can achieve its potential in terms of jobs in the UK and the UK economy?

[Lord Wilson of Sedgefield (Lab)]

I thank the noble Baroness for that question. This is a very important sector that the Government are working on, and we want to see it improve. The Government highly value regular engagement with the industry. We will be meeting the industry next week, on 26 November, to work out how we can work together and what else we can do to make sure that this sector is a success. We intend to invest in the supply chain. In due course we will publish a hydrogen strategy policy. We should remember as well that, globally, by 2050, this industry could be worth $1 trillion. That is something I want to see the UK be part of.

[Baroness Curran (Lab)]

My Lords, I am sure that my noble friend the Minister is aware that ExxonMobil is planning to close its Mossmorran ethylene plant in Fife in the great footballing nation of Scotland. I could not resist. While that result will give the workers great cheer, I seriously ask the Minister: can he set out what specific support the Government are offering at the site and how quickly that help will be available?

[Lord Wilson of Sedgefield (Lab)]

I thank the noble Baroness for her question. I congratulate Scotland on qualifying for the World Cup, and there were some really good goals last night. It was really sad to hear that news about the plant at Mossmorran, which produces ethylene for export, employing 179 people. The Minister has spoken to the chair of the company and the unions, and the Government stand ready to provide support through the DWP rapid response service. The plant is 40 years old, has been loss-making for five years, and would take £1 billion of investment to turn around. This is a commercial decision by the company. The chair of ExxonMobil has confirmed to the Minister that he was not suggesting that the closure was due to a lack of action by the Government. The Government will do all we can to help those who are in difficulty.

[Lord Howell of Guildford (Con)]

My Lords, is there not one more hydrogen potential that the Minister has not mentioned? In transporting electricity, or transporting hydrogen, the prospect can be raised of avoiding having to cover the whole country with thousands more electricity pylons, as NESO is currently predicting. I agree that that means lower costs for hydrogen, but better lower costs and transport than paying huge sums of money to owners of wind farms not to produce electricity at night at all.

[Lord Wilson of Sedgefield (Lab)]

I thank the noble Lord for his question, which raises a very important issue. It is fair to say that hydrogen cannot provide all the answers to issues around energy provision, but it can reach those hard-to-reach businesses such as steel and chemicals, for example. We need to set up a system in which we can do that. The Government are investing in that; we are spending tens of millions of pounds on doing just that. It is something that we want to see grow into the future. As I have said, by 2050 it will be a $1 trillion industry, and the UK has to be part of it.

[Lord Markham (Con)]

Following on from the point made by the noble Baroness, Lady Walmsley, US and European industries have a very simple tax incentive and subsidy plan to encourage domestic production of clean hydrogen, and their industries are responding as a result. By contrast, we have quite a clever but complicated and opaque system, which means that we are not seeing the same level of UK hydrogen production or equipment. Do we have any plans to review our system to learn the lessons from best practice around the world?

[Lord Wilson of Sedgefield (Lab)]

We are always open to reviewing what the Government do in all varieties of ways to do with tax. We will have to wait to see whether there is anything on that in the Budget next week. As I said, we are investing in the supply chain. We want to see energy produced in the most effective way. I think we will be in a position over the next couple of years, especially with the hydrogen strategy, which will be published in the next while, to show to the country and to the industry that we are taking this seriously. If anything needs to be reviewed, I am sure that we will be prepared to do that.

[Lord Patel (CB)]

My Lords, the 2021 Science and Technology Committee report made recommendations on hydrogen and fuel cells. One of the hydrogen recommendations was a strategy for the Government to produce hydrogen. I commend the Government on their commitment to produce 10 gigawatts of power through hydrogen, 50% through electrolytic hydrogen. Alongside that, the other recommendation was to develop combined heat and power fuel cells, both small-scale ones of several kilowatts and bigger cells of several megawatts, to go with electrolysed hydrogen. I wonder whether the Government have any strategy related to that.

[Lord Wilson of Sedgefield (Lab)]

On fuel cells in general, we can say that the industry has funded R&D for zero-emission technologies and transport through a number of programmes, including the zero-emission HGV and infrastructure demonstrator programme. Nearly 300 zero-emission HGVs have been produced and there are 73 planned infrastructure locations, while battery electric HGVs are currently available for purchase, with over 35 models on the market. We are doing a lot in this area, but I will take into consideration what else the noble Lord has mentioned and write to him.

[The Lord Bishop of Hereford]

My Lords, we accept that the use of hydrogen is to help us to reduce our carbon footprint but recognise that there are a variety of different ways by which that hydrogen can be generated, some of which are environmentally damaging. What steps are His Majesty’s Government taking to ensure that the hydrogen used across UK industry is sourced sustainably and in ways that will reduce CO₂ emissions, not increase them?

[Lord Wilson of Sedgefield (Lab)]

I thank the right reverend Prelate for that question. We are investing in trying to produce as much green hydrogen as we possibly can. It is a key area of hydrogen production, and we want to ensure that everything that we do is going to be carbon-neutral. Obviously, that is the kind of hydrogen that we want to produce.

[Baroness Ritchie of Downpatrick (Lab)]

My Lords—

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[Earl Russell (LD)]

My Lords, I thank the Minister for saying that the Government will publish a strategy, I think he said, in due course and in a little while. May I push him to do that as soon as possible and remind him that the industry needs certainty in order to make the investments necessary?

[Lord Wilson of Sedgefield (Lab)]

I thank the noble Earl for that question as well. Obviously, we will publish the strategy when we are ready to do so, and we want to press ahead with that. We want to make sure that the money we spend on investment takes the industry in the right direction. We are offering surety, first, by looking at the strategy and, secondly, by meeting the industry next week and by taking this issue seriously with all the investments that we are making at the moment.

[Baroness Ritchie of Downpatrick (Lab)]

My Lords, building on the Government’s recently published carbon budget growth delivery plan, what further measures are the Government currently taking to support the growth of domestic hydrogen supply chains to reduce the UK’s reliance on imports of hydrogen and fuel cell technologies?

[Lord Wilson of Sedgefield (Lab)]

I thank my noble friend for that question. Obviously, homegrown hydrogen is the way forward. The Government are considering expanding the clean industry bonus to hydrogen and will consult on proposals and publish the hydrogen strategy in the future. The UK is well placed to develop a thriving hydrogen technology, with the £1 billion Great British Energy supply fund and the £5.8 billion National Wealth Fund. We want to establish the first hydrogen network by 2031 with £500 million of government support. We are doing everything we can to make sure that this industry flourishes.