EIUG Welcomes Publication of UK Hydrogen Strategy; Calls for Further Action to Support Energy Transition for Energy Intensive Industries.
31st August 2021
The Energy Intensive Users Group (EIUG) welcomes the recent publication of the Government’s Hydrogen Strategy. The strategy correctly recognises hydrogen’s crucial role in the decarbonisation of several energy intensive industries.
Hydrogen production is energy intensive, with EIUG members both producers as well as potential consumers. Some EIUG sectors are presently trialling its use in industrial production to help inform Government policy and to assess the impacts of hydrogen on specialist plant & equipment.
Energy Intensive Industries (EIIs) contribute significantly to the economy – an annual contribution of c£38bn to UK GDP, supporting 200,000 jobs directly and 800,000 jobs. However, inward investment, growth and competitiveness have been hampered by UK electricity costs higher than those of international competitors, in some cases leading to investment, economic activity & jobs moving abroad.
The hydrogen strategy must heed the lessons from the decarbonisation of electricity sector – while the strategy must be ambitious in its scale and timing, UK EIIs using gas and hydrogen-generated power should not be put at further international competitive disadvantage by adding further to already high power prices. Rather, the costs of hydrogen production, transmission and distribution must be distributed throughout the economy, so that trade exposed EIIs aren’t unduly impacted.
The strategy must also address the situation of non-cluster energy-intensive sites. These sites will likely not have access to a network until the mid-2030s at the earliest and yet remain exposed to hydrogen development and carbon costs, costs they cannot mitigate.
‘A strategy based on these principles would help the UK energy intensive sector to expand its vital economic role; help the UK achieve net zero by 2050; and provide an exemplar of cost competitive industrial decarbonisation. EIUG looks forward to working with Government and its agencies on the strategy’s development and implementation,’ commented EIUG Chair, Andrew Large.
The EIUG represents the UK’s energy intensive industries including manufacturers of steel, chemicals, fertilisers, paper, glass, cement, lime, ceramics and industrial gases.
However, as foundation industries, they are both energy and trade intensive. If they are to compete in the global markets in which they operate and remain located and investing in the UK, they need access to secure, internationally competitive energy supplies and freedom to export without tariff barriers.
EIUG Contact: Amrik Bal, Director Energy Intensive Users’ Group (BalA@eiug.org.uk)