There is a significant lack of green hydrogen policy, leaving a Green Hydrogen Gap and driving us off our decarbonisation course. In this roadmap, we navigate the route to stronger green hydrogen policy and demonstrate how it can be used to decarbonise the shipping and aviation sectors.

Current policy landscape:

Shipping:

• UK Climate Change Committee, 2023: The UK government reported to currently have “no credible policies” in place to decarbonise shipping. 

• UK Clean Maritime Plan, 2019: Vast majority of emission reductions will come from low or zero-emission fuels. No regulatory framework for increasing these fuels’ uptake.  

• UK government, 2023: To stay within the carbon budget, 1% of all UK shipping fuels used in 2030 needs to be low carbon, increasing to 28% for UK international shipping by 2035, and 42% for domestic shipping by the same year. 

• IMO Greenhouse Gas reduction strategy for global shipping, 2023: Target for reaching net-zero emissions by 2050 achieved by aiming for 10% uptake of zero or near-zero emission fuels and/or energy sources by 2030.  

Aviation

• Jet Zero Strategy, 2022: Declared SAF mandate, set target of five UK SAF plants operational by 2025, and started research into hydrogen-powered zero emission flights (ZEF). 

• UK SAF Mandate, 2024: The UK government announced legislation starting in 2025 mandating increasing levels of SAF in aviation fuel mixes from 10% in 2030 up to 22% in 2040, with a sub-mandate for green hydrogen-derived e-fuels of 3.5% in 2040. 

• King’s Speech, 2024: Revenue Support Mechanism announced to guarantee future income to SAF producers and offset risk.  

Green Hydrogen:

• UK Hydrogen Strategy, 2021: Goal of 10GW of low-carbon hydrogen production capacity by 2030, at least half green hydrogen. 

• UK Government Hydrogen Strategy Delivery update, 2023: Anticipates low-carbon hydrogen will decarbonise industrial processes, provide power, act as a feedstock or fuel for heavy transport applications such as shipping and aviation, and potentially be used to heat homes (to be decided in 2026).  

• Green hydrogen included in the government’s Jet Zero strategy, 2022, and Clean Maritime plans, 2019. 

• H2 will need to be scaled up massively to meet projected shipping and aviation decarbonisation needs. 

The policies we need:

Cross-governmental approach:

• Transport, energy and industrial policies need to be harmonised through cross-governmental collaboration, including input from non-governmental stakeholders in energy, aviation and shipping industries.

• The transition from fossil fuels can and must boost rather than hinder UK economic growth – departmental collaboration is the only way to ensure efficiency.

Being honest about our solutions:

• Recognise the importance of green hydrogen in decarbonising hard-to-electrify sectors which have no other routes to decarbonisation.

• Recognise that green hydrogen should be highly prioritised in these sectors, rather than ones that can be electrified such as road transport and household heating.

• UK policy should recognise the leading edge the UK has in sustainable aviation innovation (through Cranfield Aerospace Solutions and ZeroAvia), to support developing and exporting these technologies worldwide.

• Recognise that incentivising investment in “transition fuels” such as fossil LNG or some SAFs risks directing UK investment into what could ultimately become stranded assets. This is because future regulation or demand shifts in the passage to full decarbonisation could phase out these solutions.

Bringing supply and demand in line with shipping and aviation’s decarbonisation needs:

• The Revenue Support Mechanism must prioritise incentivising fuels with the greatest emission reduction potential – green hydrogen-derived e-fuels. 

• The UK SAF mandate must be amended to include more ambitious sub-mandates for the use of green hydrogen-derived fuels. 

• As we have a SAF mandate, we need an e-fuel mandate for the shipping industry.

Economic benefits:

• Ambitious sustainable fuel mandates will spur production, with the resultant job creation leading to surges in housing, education, transport, and utilities demand in surrounding areas, drawing investment, creating induced jobs and multiplying economic benefits.    

• The UK’s SAF industry[11] could add £1 billion to UK GDP by 2035 with 6,500 well-paid jobs created; £16.7 billion per year in exports by 2050, supporting approximately 130,000 highly paid jobs.

Our Vision:

• An entrenched and holistic approach to government policymaking that reduces inefficiencies and harmonises energy, transport, green and industrial policies. 

• Government regulations stimulate green hydrogen-derived fuels demand. 

• Green hydrogen-derived fuels production increases, creating a new market into which small organisations grow, equitably distributing the economic gains of green industry across diverse areas of the country with inevitable knock-on socio-economic benefits in job-creation and investment. 

• A large but regulated green hydrogen market emerges that is limited to hard-to-electrify sectors including aviation and shipping, avoiding the inefficient misuse of green hydrogen in electrifiable sectors. 

• The gradual transition from fossil fuels to green hydrogen-derived e-fuels in the shipping and aviation sectors sets the country on course for its long-term decarbonisation targets. 

Want to learn more? Read our Green Hydrogen Gap report here.*

* This factsheet draws on information and statistics included in the Green Hydrogen Gap report and supporting research conducted by Arup.