Funding mechanism for the Hydrogen Production Business Model: proposed design of the Gas Shipper Obligation

This consultation seeks views on proposed design choices of the Gas Shipper Obligation. The Gas Shipper Obligation is intended to be the long-term funding mechanism for initial hydrogen production projects funded through the Hydrogen Production Business Model. It may also fund further hydrogen projects, subject to future decisions on the hydrogen programme and the funding of future hydrogen production projects.

The Hydrogen Production Business Model is designed to provide revenue support to hydrogen producers, to overcome the operating cost gap between low carbon hydrogen and high carbon fuels. It is intended to incentivise investment in low carbon hydrogen production and usage, and to deliver security of supply to end users, recognising that both cost and supply security are key considerations for switching. This will help to scale up delivery of the UK hydrogen economy and achieve our Clean Energy Superpower and Growth Missions.

We have published an analytical annex alongside this consultation. It focuses on the impact of the Gas Shipper Obligation on gas users, including fuel poor households, and small and micro-businesses.

This consultation is open to anyone to respond, but will be of particular interest to:

• gas shippers
• relevant participants in the gas market
• hydrogen production projects
• consumer groups

We encourage respondents to review both the consultation and analytical annex, and respond using the online response form. 

Read our consultation privacy notice.