Clean Energy Push: UK Invests in Hydrogen and Carbon Capture

The UK government has announced over £500 million in new funding for hydrogen transport and storage, alongside major investment in carbon capture and storage (CCUS) infrastructure—cementing both as key tools in the shift to a low-carbon, resilient energy system.

The new hydrogen network will connect producers to industrial users and power stations, starting in Merseyside, Teesside, and the Humber. These regions are home to energy-intensive industries where emissions are especially hard to eliminate.

That includes steelmaking, where hydrogen can replace coal in high-temperature furnaces; chemical manufacturing, which relies on hydrogen feedstock often made from fossil fuels; and heavy transport, like shipping and freight, where batteries may not be practical. Hydrogen also offers long-term energy storage, converting surplus renewable power into a fuel that can be stored and dispatched when demand rises.

Energy Secretary Ed Miliband called hydrogen “homegrown energy that will power British industry for generations,” positioning the network as a clean energy backbone for the UK’s industrial economy. The funding builds on the UK’s Hydrogen Allocation Rounds, with more than £2 billion already allocated to low-carbon hydrogen production, and growing private investment in hubs like Milford Haven and High Marnham.

At the same time, the government is expanding support for carbon capture and storage (CCUS), with funding for two major infrastructure projects: the Acorn project in Aberdeenshire and the Viking project in the Humber. These initiatives aim to capture carbon dioxide from industrial facilities and power stations, then transport it via pipeline to be permanently stored under the North Sea.

In Scotland, support also includes the SCO₂T Connect pipeline, which will repurpose over 170 miles of existing gas infrastructure to carry captured CO₂ from Grangemouth to offshore storage. Together, Acorn and Viking are expected to support tens of thousands of jobs and help maintain the energy and engineering skills base in both regions.

Carbon capture offers a potential pathway to reduce emissions in sectors like cement, refining and chemicals—where full electrification may be costly or impractical. It also enables low-carbon hydrogen production from natural gas, linking CCUS directly to the hydrogen strategy. However, the technology remains expensive and has faced setbacks in the past. Its success will depend on delivery, scalability, and integration with wider decarbonisation plans.

Combined with the government’s hydrogen investment, these developments mark a broader shift toward an energy system designed to cut industrial emissions while enhancing flexibility, reliability, and the supply of cleaner domestic energy.