A major new industry report launched in Parliament paints a picture of a UK hydrogen sector eager to invest, expand and create thousands of jobs – yet increasingly frustrated by slow and uncertain policy delivery.
While confidence in the long-term role of hydrogen remains firm, businesses warn that weak demand signals now pose the biggest threat to progress across the UK hydrogen economy.
The findings come from The State of the Hydrogen Nation, a wide-ranging study published by the Hydrogen Energy Association (HEA). Drawing on insights from 142 organisations active across the hydrogen value chain, the report offers the most detailed snapshot yet of sentiment, investment plans and barriers facing UK hydrogen.
Dr Emma Guthrie, Chief Executive of HEA, explained: “This report shows a sector that is committed, capable and ready to deliver – but increasingly constrained by uncertainty over demand, policy design and delivery timelines.
“The question is no longer whether hydrogen has a role in the UK’s energy system, but how quickly we move from ambition to deployment. With clearer signals and faster delivery, the UK can unlock thousands of skilled jobs, attract investment and secure a leading global position.
“In short, collaboration and coordinated action at pace are essential to creating the right conditions to enable investment, create high-skilled jobs and to support the UK’s net zero and energy security objectives.
“The HEA, alongside its members and partners, stand ready to work with Ministers, officials, Parliamentarians and the wider UK hydrogen industry to make that happen.”
A broad and representative snapshot of UK hydrogen
Respondents to the survey span every part of the United Kingdom, covering all home nations and a diverse mix of start-ups, SMEs and global corporates with a stake in UK hydrogen.
Participants operate across production, infrastructure, transport, manufacturing, end-use and finance, providing a holistic view of how the sector is developing on the ground.
The survey was supported by a coalition of trade bodies from the hydrogen, clean energy and end-user communities.
Contributions from Hydrogen Scotland and Hydrogen Ireland underscore the growing importance of regional clusters in building a resilient and competitive UK hydrogen landscape, where local infrastructure and demand can develop in parallel.
Confidence softens, but belief in hydrogen endures
Although overall confidence has dipped slightly compared with last year, the report makes clear that this is not driven by doubts about hydrogen itself. Instead, businesses point to frustration over delays to policy decisions, funding rounds and delivery timelines.
The UK’s regulatory framework for hydrogen continues to be viewed as credible and investable, with many organisations praising its underlying design. However, uncertainty around when and how policies will be implemented is beginning to weigh on investment decisions.
Nearly half of respondents say government commitment to UK hydrogen appears weaker than a year ago, citing stop-start processes and a lack of clear signals.
Despite this, appetite to invest remains resilient. More than 84% of organisations expect their UK hydrogen investment to either increase or remain stable over the next 12 months, suggesting that capital is waiting on the sidelines for greater clarity rather than walking away.
Demand emerges as the critical bottleneck
The report identifies demand creation as the single most pressing challenge facing UK hydrogen. While supply chains and production capacity are gradually taking shape, many projects are struggling to reach a final investment decision because they lack confidence in future customers.
Businesses seeking offtakers report widespread difficulty securing long-term agreements, while potential end-users highlight the complexity of integrating hydrogen into existing operations.
Concerns around infrastructure availability, cost competitiveness and contract structures are compounded by a perceived lack of durable demand-side policy support.
Without stronger and more predictable signals on where hydrogen will be used – particularly in industry, transport and power – the report warns that deployment could stall even where production support mechanisms already exist.
Jobs potential hinges on faster policy delivery
One of the starkest messages in the report is the scale of the employment opportunity at stake. Under current conditions, respondents estimate the UK hydrogen sector could support around 3,800 jobs by 2030.
However, under an improved policy environment marked by quicker decisions, clearer demand signals and better coordination, that figure could rise to approximately 17,000 jobs.
This four-fold increase would span engineering, construction, manufacturing, infrastructure development and long-term operations, reinforcing UK hydrogen’s potential as a cornerstone of a future clean energy economy.
Global competition is intensifying
Internationally, the UK still ranks as one of the most attractive destinations for hydrogen investment, second only to Germany in the eyes of surveyed businesses. Yet there is growing concern that competitor nations are moving faster from ambition to execution.
Germany, in particular, is seen as translating policy commitments into projects at a greater speed, raising fears that capital, skills and supply chains could be diverted away from the UK if progress does not accelerate.
A pivotal moment for UK hydrogen
The report concludes that UK hydrogen policy has reached a critical juncture. Responsibility for delivery is spread across multiple government departments, regulators and public bodies, making coordination essential.
Aligning production incentives, demand mechanisms, infrastructure planning and carbon pricing will be key to unlocking investment and restoring confidence.
With industry ready to act, the message from the HEA is clear: the foundations for UK hydrogen are in place, but pace and coherence will determine whether the opportunity is fully realised.
