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.
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?
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.
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?
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.
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.
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.
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?
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.
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.
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.
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?
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.