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industry & government news

UK GAS USERS COULD FACE HYDROGEN

LEVY ON HOUSEHOLD BILLS

MINISTERS ARE BRACED FOR A BACKLASH
FROM MPS ABOUT THE COST OF NET ZERO

THE BRITISH GOVERNMENT is industry. The mechanism will be similar Britain, but some environmental groups
exploring adding a new levy to to “contracts for difference” which fear it will secure the long-term future
household gas bills as a subsidy to have been used to guarantee the price of gas producers and prove less effective
hydrogen producers as it attempts to of energy produced by offshore wind at cutting emissions than home-heating
kickstart the fledgling industry. companies and by the Hinkley Point C solutions such as heat pumps.
The government’s much-anticipated nuclear reactor being built in Somerset, Blue hydrogen is seen as more cost
Hydrogen Strategy will set out ways to according to government officials. effective than its green version, at least
increase the use of the low emission gas The use of CFDs has been credited initially, as production can use existing
as a part of the UK’s plan to reach its with helping to drive down the price of infrastructure like gas pipelines.
2050 net zero carbon target, reports offshore wind by more than 70 per cent But critics have warned that
The Financial Times. over the past decade, turning it into government or bill-payer support for
The document will launch a one of the cheapest forms of electricity hydrogen derived from natural gas
consultation on a new type of generation. But in the short term, it should be limited on the basis that it is
mechanism to ensure that hydrogen can carry a higher cost for consumers, a transitional fuel.
companies can receive a predictable as governments look for methods to The idea of a new hydrogen charge on
price for future sales. subsidise support for cleaner forms of bills comes as ministers are braced for
Households account for nearly a fifth fuel and the associated infrastructure. a backlash from some backbench MPs
of carbon emissions. The government Prime Minister Boris Johnson about the impact of the 2050 net zero
last year set out plans to upgrade home recently set out a 10-point green plan target on household finances.
heating systems, replacing gas boilers which included a new target of 5GW BEIS will publish a detailed net
with low carbon heating systems such as of low carbon hydrogen production zero strategy in September while the
hydrogen appliances. Hydrogen is also capacity by 2030 and 1GW by 2025. Treasury will release a simultaneous
expected to play a role in hard-to-electrify The oil and gas industry has been a report examining the cost of reaching
sectors such as shipping and heavy significant supporter of blue hydrogen in the target.

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11/08/2021 09:36
News.indd 2
News.indd 2 11/08/2021 09:36