The Spring Statement has come and gone, but there was some news hidden among the headlines that may have gone unnoticed.
Signalling a positive direction for the hydrogen industry, the Government has published a consultation on its plans to remove the Climate Change Levy (CCL) from electricity used in electrolysis to produce hydrogen. This will help the production of low carbon hydrogen, for use across a number of sectors including heavy industry.
We particularly welcome this news at the Hydrogen Valley programme, where cost-effective hydrogen will be welcome across the region. Our advocates include some of the UK’s leading building materials suppliers, food and beverage manufacturers, ceramics companies and more aiming to drive sustainable growth in the West Midlands region. In hard to decarbonise industries that have high energy demands, a reliable, cleaner, and more attainable supply of hydrogen can prove invaluable to these organisations.
Why spotlight the Midlands?
The east-west corridor that the Hydrogen Valley programme focuses on, encompassing Norfolk in the East to Shropshire in the West, is historically known for its industrial might and manufacturing expertise. It has a unique history and is still to this day home to major operations in power generation, automotive manufacturing, metal processing, and building materials.
The Midlands is also largely landlocked, and green hydrogen production in an area with limited access to renewable energy resource such as offshore wind can prove difficult. However, regional hydrogen production initiatives will help us to realise the potential that the Midlands has to lead a new green industrial revolution, establishing a hydrogen economy to accelerate industrial decarbonisation.
As industry and manufacturing has such a huge prevalence in the region, hydrogen production initiatives will also help to enhance the socio-economic benefits associated with the energy transition in the region. Where rapid decarbonisation is needed, jobs across the hydrogen supply chain from production to consumption and storage will help to harness existing talent while repurposing older infrastructure.
The spotlighted region is also strategically located in the middle of England, making it a key piece of the puzzle for the development of a hydrogen economy nationally. Supply and demand located within the region for low carbon hydrogen will inform the timing for repurposing the national gas network, as the industry receives the confidence that industrial demand will require reliable hydrogen infrastructure.
Producers and consumers in the region
We have been working with organisations located within the region from across the supply chain to understand the demand for low carbon hydrogen within the region. This engagement is vital to developing a comprehensive image of hydrogen feasibility in the Midlands, which will help to provide confidence to attract investors in the sector.
Large national companies such as British Sugar, Palm Paper and Compleat Food have all established manufacturing bases in the region and produce goods and services both nationally and globally. British Sugar is the UK’s leading sugar producer for the British and Irish food and beverage markets, while Palm Paper produces paper grade products across both the UK and Europe. Compleat Food is a fast-growing supplier of chilled foods, producing a diverse range of products, including bakery products, meats, party food, dips, and more. As around one quarter of the UK’s carbon emissions comes from the food we consume, the Midlands could become a blueprint for how hydrogen can significantly reduce carbon emissions from consumer goods.
High heat processes are also best placed to take advantage of the growing opportunity for hydrogen consumption within the region. Requiring a large amount of energy, electrification can prove expensive and impractical. Organisations such as Aggregate Industries, CEMEX, Hill & Smith PLC, Wienerberger, and Keeling & Walker engage in energy intensive processes manufacturing building materials and engineering solutions. Located within the region, these high-profile companies are all engaging with the Hydrogen Valley to explore how hydrogen can decarbonise their processes.
Decarbonising these key industries can prove monumental for entire supply chains, from consumer goods and services, hospitality and retail, to local infrastructure and the construction sector. The Midlands is a key focus for the development of hydrogen infrastructure to secure an energy independent, lower carbon, and prosperous nation fit for the future.
If you believe that your organisation could take advantage of hydrogen deployment within the programme region, contact nicole.kenny@cadentgas.com or visit the Hydrogen Valley website.
