Government Shortlists 27 Green Hydrogen Projects for Funding

In a significant step forward for the UK’s low-carbon transition, the government has unveiled a shortlist of 27 green hydrogen projects that could soon receive vital grant funding and revenue support. These projects are aimed squarely at powering the next generation of clean manufacturing across the nation's industrial strongholds.

The Department for Energy Security and Net-Zero (DESNZ) announced today (7 April) that the Second Hydrogen Allocation Round (HAR2) has launched. This competitive program is designed to identify and support hydrogen production facilities that meet the government's strict low-carbon criteria. These shortlisted projects now enter a critical phase where funding is within reach but not guaranteed.

Once a fringe player in clean energy discussions, Hydrogen is gaining momentum. Unlike fossil fuels, hydrogen produces zero emissions at the point of use, making it a strong contender for decarbonising sectors that have historically been hard to electrify — like heavy industry, shipping, and high-heat manufacturing. But there’s a catch: not all hydrogen is created equal.

Globally, a staggering 92% of hydrogen is still “grey”—produced from fossil fuels via steam methane reforming, with significant carbon emissions baked into the process. The UK, however, is drawing a firm line. Only projects producing green hydrogen—generated via electrolysis powered by renewable electricity—are eligible under HAR2. And that’s exactly what all 27 shortlisted projects are offering.

If greenlit, the projects could power a wide range of industries: glassmakers, brick manufacturers, ammonia producers, and even those working on sustainable aviation fuels. The broader aim? To inject low-carbon hydrogen directly into industrial operations, slashing emissions where they matter most—at the source.

Among the industries expected to benefit are those with high-temperature processes that are notoriously difficult to decarbonise through electrification alone. In this context, hydrogen becomes a clean energy solution and a strategic enabler for the UK's climate and economic goals.

This isn’t the first time the UK has rolled the dice on hydrogen. Under HAR1, launched by then-Prime Minister Rishi Sunak, 11 projects were awarded £90 million in capital grants and over £2 billion in revenue support, unlocking a combined 124 megawatts (MW) of hydrogen production capacity. So far, five of those have inked their final contracts, including flagship efforts like the Bradford Low Carbon Project in Yorkshire and the Cromarty Hydrogen Project in Scotland.

But history also offers a cautionary tale. Being shortlisted does not guarantee funding. As with HAR1, many current HAR2 hopefuls will likely fall short. Developers must now provide updated technical and financial information and continue to refine their proposals if they hope to secure a slice of the funding pie.

The UK’s target of 10GW of low-carbon hydrogen production by 2030 remains a central plank of the national climate strategy. Although initially set under Conservative leadership, the Labour-led government has embraced the mission with its own twist, claiming the hydrogen sector could unlock over £1 billion in private investment by 2029.

Industry Minister Sarah Jones said: “We are deploying hydrogen at a commercial scale for the first time – not just investing in a technology – but investing in British jobs, our proud manufacturing communities and our energy security.

“From distilleries and sustainable aviation fuel to public transport and clean energy

generation, hydrogen can power our everyday life and unlock clean energy growth across the country as part of our Plan for Change.”

What’s clear is this: the race to scale green hydrogen is officially on. With HAR2’s shortlist now public, the country’s industrial future may well depend on which of these 27 projects makes the final cut.

The Hydrogen Energy Association’s CEO, Dr Emma Guthrie, said the shortlist is a “much-anticipated announcement” that “brings vital clarity” to the sector.