Unraveling Barclays' blueprint for transforming the UK's hydrogen aspirations into tangible outcomes
Barclays Outlines Key Policy Recommendations for UK's Hydrogen Economy
Barclays, a leading global bank, has put forward four key policy recommendations for the UK government to support the scaling of private finance for clean hydrogen and turn the UK's hydrogen ambitions into reality.
- Establishing Clear Market Frameworks
Barclays suggests that the UK government should establish clear and credible market frameworks with supportive mandates and incentives. This includes ensuring verification processes and emissions criteria are well-defined to help projects monetize potential subsidies or credits.
- Financial Support Mechanisms
The bank also recommends implementing strong and targeted financial support mechanisms such as tax credits, subsidies, or transition finance products tailored to hydrogen technologies. These should be designed to attract multiple revenue streams and reduce early-stage investment risks.
- Local and Regional Partnerships
Barclays emphasises the importance of encouraging local and regional state-level actions and partnerships to build hydrogen economies from the ground up. This learning from successful international examples where localized government enablement was critical.
- Accelerated Project Timelines
The bank advises the UK government to accelerate project timelines with urgent policy and regulatory support to meet critical construction and deployment deadlines, addressing risk and permitting barriers to avoid missing key market-build windows.
These recommendations align with insights from industry experts, who highlight the necessity of a dual approach combining mandates and incentives, as well as the need for urgency to capitalise on a "make or break" 2.5-year horizon for project viability.
Marie Freier, EMEA Co-Head of Energy Transition Group at Barclays, emphasises the importance of learning from setbacks in the US and European hydrogen markets. She suggests that the UK government should consider where clean hydrogen can play the most cost- and climate-effective role.
In a recent announcement, the UK government has announced new financing for low-carbon hydrogen through the National Wealth Fund. The government also plans to move forward with support for 11 green hydrogen producers.
Barclays, which has a target of $1 trillion in sustainable and transition-related finance by 2030 and generates hundreds of millions in revenue from climate finance, underscores the critical role of aligned policy frameworks to mobilize private capital effectively in clean hydrogen projects in the UK.
The bank also recommends that the UK government communicates a pragmatic, actionable view on its role in the international hydrogen economy, retains a credible and bankable revenue support mechanism for clean hydrogen, and delivers a detailed hydrogen roadmap with enabling policy actions and clear timeframes. The government should also ensure its clean hydrogen revenue certainty mechanism remains credible as it matures to a steady-state, price-based competitive allocation process.
Finally, Marie Freir advises the UK government to instill confidence and growth across the hydrogen value chain. By following these recommendations, the UK government can help unlock private investment and grow its hydrogen sector at scale.
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