Government Issues Advance Notice of the Net Zero Hydrogen Fund (NZHF)

From early next year, funding will be available for UK businesses to support at-scale deployment of low carbon hydrogen production during the 2020s.

The Net Zero Hydrogen Fund (NZHF), announced in the Prime Minister’s Ten Point Plan for a Green Industrial Revolution, will be delivered between 2022 and 2025. The aim is to support the commercial deployment of new low carbon hydrogen production projects during the 2020s, ensuring the UK has a diverse and secure decarbonised energy system fit for meeting its ambition of 5GW low carbon hydrogen production by 2030, and commitment to reach net zero by 2050.

The UK Government is currently seeking views to inform the design of the programme. Its preferred approach is for the NZHF to be funded and delivered on a UK-wide basis to support decarbonisation across the UK. The Government will work closely with the Devolved Administrations as it develops and finalises the design of the NZHF. It is expected to be open to companies involved in the construction of low carbon hydrogen production projects, and those that are looking for development support for low carbon hydrogen production projects.

The NZHF will be worth up to £240 million. Levels of support for individual projects and the form of support (grants, loans, equity funding) have yet to be stipulated.

The scheme will offer capital co-funding for the build of new low carbon hydrogen production facilities, which includes:

  • Projects that will also require revenue support via a hydrogen business model; and projects that will not require revenue support via a hydrogen business model.
  • Development costs for feasibility and Front End Engineering Design studies (FEED), with possible support for post-FEED studies.

The Government intends to launch the NZHF in early 2022. Further details and guidance will be provided when they become available.

(This report was the subject of a GRANTfinder Newsflash.)