Brexit Hinders UK’s Efforts to Promote Hydrogen Trading

According to analysts, the UK hydrogen strategy, which was published last week (17 August), shares many parallels with the EU’s own design, which was unveiled a year ago. However, Brexit has hampered economic and regulatory cooperation between the two sides, with the UK likely to become a rule-taker at the end of the day.

Although the UK government did not make European cooperation a priority in its hydrogen strategy, the paper does state that international trade and collaboration with European partners are critical to the strategy’s success.

The extension of “regional value chains” and partnership with North Sea countries on hydrogen “generation, storage, and transportation” are among the opportunities identified by the UK government.

“Working with our the North Sea and European neighbors on a voluntary basis will be vital to developing approaches that will support UK hydrogen investment and facilitate regional trade, including identifying barriers with regards to cross-border pipeline and shipping trade,” said Kwasi Kwarteng, the UK Secretary of State for Business, Energy and Industrial Strategy.

There is also interest in exploring the potential for pan-European dedicated hydrogen transport infrastructure, as well as the use of existing or new gas interconnectors between the UK and Belgium, the Netherlands, and Ireland, which could allow the UK to trade hydrogen or low-carbon gas with our neighbors in the future.

Research and innovation projects supported by the EU’s €95.5 billion Horizon Europe programme, as well as involvement in EU-sponsored industrial collaborations known as joint undertakings, are another important area of cooperation.

The United Kingdom contributed significantly to the Fuel Cells and Hydrogen Joint Undertaking (FCH JU) and will continue to do so in the Clean Hydrogen Partnership for Europe.

However, now that the United Kingdom has exited the European Union, any bilateral collaboration will undoubtedly become more problematic.

The next Joint Undertaking will focus on hydrogen generation, delivery, and end-use, and it is in these sectors that the UK seeks cooperation, according to its policy.

The conclusion of two ongoing discussions will determine the circumstances under which the UK will be able to participate.

The first is ongoing discussions to flesh out the details of the UK’s future participation in EU research and innovation programmes. The UK will join Horizon Europe as an associate country, alongside Switzerland, Norway, and 14 other non-EU countries, under the UK-EU trade and cooperation deal signed on December 30. The UK will provide roughly €2 billion per year to the program’s budget in exchange. The EU must then agree on the legal structure for the next round of joint ventures, which will be finalized in the following months.

However, neither the Commission nor the UK’s Department for Business, Innovation, and Skills would say whether any meetings were planned to address the practicalities of EU-UK hydrogen cooperation, including critical issues like trade and the potential development of a low-carbon hydrogen joint standard.

Despite the unavoidable differences produced by Brexit, the UK claims that cooperation with EU countries remains a priority and that it continues in forums other than the European Union.

Despite the fact that the EU and the UK have drifted apart since Brexit, researchers believe both sides have pursued similar hydrogen strategies, indicating a wide range of possible areas for collaboration.

The UK policy, like the EU blueprint from a year ago, proposes a “twin-track” approach to hydrogen development, with “green” electrolytic and “blue” carbon capture-enabled hydrogen production. In order to achieve their net-zero emission goal, both plans strive to develop a standard for low-carbon hydrogen.

According to Jan Rosenow of the Regulatory Assistance Project (RAP), a non-profit organization, the fundamental distinction is in the prioritization of green versus blue hydrogen.

Despite having a more restrictive approach to hydrogen than the UK, the EU has several advantages, the first of which is the bloc’s regulatory muscle, which is bolstered by its massive internal market of 447 million people.

If Britain wishes to buy or export hydrogen with Europe, it will have to follow the EU standard. According to them, Brexit will make the UK’s hydrogen strategy more difficult to implement because the EU will build its own hydrogen policy and regulatory framework.

Divergences between the EU and the UK on blue hydrogen could become a cause of contention at some stage. This could lead to political clashes between the EU and the UK’s visions, obstructing the creation of a European-wide hydrogen market.

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