Investment and policy needed to unlock UK clean fuels for air and sea

17 September 2025

5.3M tonnes of captured CO₂ and 1.36M tonnes of hydrogen required annually to meet UK clean fuel demand by 2050
Clean fuels currently four to nine times more expensive than fossil fuels; innovation and policy reform critical to closing this gap
Repurposing oil and gas infrastructure and industrial sites offers fastest, most cost-effective route to scaling clean fuels, new report finds

The UK could supply enough hydrogen and captured carbon to fuel aviation and shipping by 2050 – but only if urgent action tackles gaps in infrastructure, innovation and policy, according to a new report.

Analysis by the Net Zero Technology Centre (NZTC) shows that by 2050, the aviation and maritime sectors alone will require more than 5.3 million tonnes of captured carbon dioxide and around 1.36 million tonnes of hydrogen each year to meet decarbonisation targets.

Meeting this demand will require more than 5 gigawatts of hydrogen production capacity. The report highlights that the UK is currently only a third of the way to its 2030 hydrogen target of 10 gigawatts, with just 3.45 gigawatts committed.

Better use of renewables could unlock additional supply. In 2023, four terawatt hours of renewable electricity were curtailed at a cost of £300 million. This energy could have produced clean hydrogen to support decarbonisation across multiple sectors.

Clean fuels remain four to nine times more expensive than fossil fuels. The report finds that repurposing oil and gas infrastructure offers the fastest, most cost-effective route to scaling clean fuels while supporting regional economic growth. Transforming industrial hubs such as Sullom Voe in Shetland, Grangemouth near Falkirk, and Teesside in North East England into clean fuel centres could speed up production and cut production costs.

Early UK green hydrogen projects currently cost around £9.50 per kg, further highlighting the urgent need to close the cost gap for market growth and long-term competitiveness.

NZTC outlines four strategic priorities to unlock the UK’s alternative fuels market:

Policy reform to incentivise carbon use over storage
Investment in integrated infrastructure linking hydrogen, carbon capture and fuel synthesis
Support for innovation and early adoption to close the cost gap with fossil fuels
Expansion of clean fuel mandates beyond aviation and shipping to include heavy industry and power – building on existing SAF and maritime strategies

Hayleigh Barnett, Technology Principal at NZTC, said:

“Alternative fuels will play a key role in decarbonising the UK’s hardest-to-abate sectors. We have the foundations to lead globally but must move quickly and decisively.

“Developing integrated infrastructure that connects hydrogen production, carbon capture, fuel synthesis and distribution is essential to enabling clean fuels at scale. Backing carbon utilisation and supporting early projects will help close the cost gap with fossil fuels and unlock private investment.

“This is also a major opportunity for regional growth. With the right support, places like Grangemouth, Teesside and Shetland can become clean fuel hubs – creating skilled jobs and long-term economic value.”