The speech made by Alexander Stafford, the Conservative MP for the Rother Valley, in the House of Commons on 26 November 2020.
I refer the House to my entry in the Register of Members’ Financial Interests. It is a tremendous privilege to have secured today’s debate on the use of hydrogen transport. It is such thrilling news because, unbelievably, this is the first dedicated debate on hydrogen to take place in the UK Parliament. We can all agree that it is long overdue.
It is now clear that hydrogen will be a critical component of our energy and transport policy as we strive to achieve net zero by 2050. We can no longer afford to sit on our hands. At present, 34% of all UK carbon emissions come from transport. This is a colossal statistic. If we do not prioritise decarbonising our transport sector, we simply will not meet our net zero target.
I welcome the work that the Minister and the Government have done and will continue to do to ensure that hydrogen is so high up the Government’s agenda. Indeed, the Government have signalled their intent regarding hydrogen in their 10-point plan for a green industrial revolution announced just last week. The Minister has confirmed that the Government will produce an economy-wide hydrogen strategy for the UK, which we understand is planned to be published in February. I look forward to the promised creation of a hydrogen transport hub, the all-hydrogen bus town scheme and implementation of the aforementioned 10-point plan, which includes policies for hydrogen use and production.
Members will be well versed in my advocacy for hydrogen in this House. I serve as a vice-chair of the all-party group on hydrogen and I champion hydrogen technology consistently in my speeches and articles on levelling up and our green recovery. My commitment to this exciting technology stems from my life prior to entering Parliament. Before I was elected to represent the people of Rother Valley, I worked on environmental issues at the World Wildlife Fund before focusing on the UK’s global transition to a green future at Shell. It was then that I realised we need a multi-pronged approach to low-carbon transport.
Despite what some may tell us, there is no silver bullet or panacea to help us to achieve our aims. This is why, alongside other solutions such as electric vehicles, biofuels and carbon capture and storage, we must ensure that we are at the forefront of the hydrogen industry, both in its use and in its production. We must steal a march on international competitors, cornering the market for UK plc and cementing our place as the world leader in hydrogen transport. I like to describe this as a win-win situation, because a strong UK hydrogen industry will create thousands of jobs across the country, cut carbon emissions dramatically and boost our post-covid and post-Brexit economy.
What exactly is hydrogen and how does it work? In layman’s terms, hydrogen is a gas that can combust in a way that produces no greenhouse gas emissions. Hydrogen can be produced by a number of methods. The most exciting of these creations is green hydrogen, which is made by electrolysis, using renewable electricity from solar and wind power. While we develop our infrastructure for green hydrogen, we can create blue hydrogen, too, which is made by reforming methane, where the carbon dioxide generated can be captured and stored.
I must address the excitement around electric vehicles, and it certainly is a wonderful technology. However, it is not the sole solution to decarbonising transport, and it has significant shortcomings that need to be addressed. It is estimated that it will cost £16.7 billion to get the UK’s public charging network ready for mass EV market. This would require 507 new charge points to be installed every single day from now until 2035. Furthermore, there is no recognised figure for how much it will cost to upgrade the grid, but industry figures suggest that it will require hundreds of billions of pounds.
Moreover, we must mention the need to import battery technology from the People’s Republic of China, a country that owns 73% of the world’s battery supply, often made with electricity from coal-powered stations. Ultimately of more concern is EVs’ unsuitability for heavier vehicles, such as HGVs, and longer-distance journeys, and I will cover that shortly. Hydrogen fuel cell electric vehicles, on the other hand, offer flexibility and freedom. Hydrogen vehicles do not produce any greenhouse gases from their tailpipe. The only emission is water vapour. If the hydrogen used by the vehicle is made with renewable sources of electricity or with the help of carbon capture and storage, the process of driving a hydrogen vehicle is nearly free of CO2 emissions, as well as other particulate matter.
In hydrogen vehicles, energy is stored as compressed hydrogen fuel. This means that hydrogen fuel cell electric vehicles can drive up to 700 km without refuelling and, just like a conventional car, they take only a few minutes to refuel. This is likely to see the deployment of hydrogen in cars and vans that travel large distances or for heavy utilisation, which battery EVs are unsuitable for.
I am excited about the prospects for hydrogen transport beyond cars. This is where hydrogen technology really comes into its own. A hydrogen fuel cell offers cleaner options for parts of the transport sector, particularly in larger vehicles that are less suited to electrification and where consumers demand rapid refuelling. The high energy density of hydrogen means that it is expected to be the dominant choice for HGVs, buses, shipping and rail, as well as its potential use in aviation.
Hydrogen buses show particular promise, and we are fortunate in Britain to boast the expertise of Wrightbus. It is currently building 3,000 hydrogen buses in the UK for use across the country by 2024, which is the equivalent of taking 107,000 cars off the road.
Stephen Flynn (Aberdeen South) (SNP)
I apologise for missing the start of the hon. Member’s speech on an incredibly important matter. He has touched on hydrogen buses, and in Aberdeen, the city I represent, hydrogen buses have been rolled out in great numbers over recent years. Does he agree with me that what we need to see is a greater expansion of hydrogen buses not just in Aberdeen, but across Scotland and the entire UK?
I thank the hon. Member for that point, and I could not agree more. I was talking to the Under-Secretary of State for Scotland, my hon. Friend the Member for Banff and Buchan (David Duguid), about it recently, and it was exactly that point he highlighted.
That is exactly why, in February, when the Government announced 4,000 zero emission buses, I believe they should have been announced as hydrogen buses, because the economies of scale involved will revolutionise the transport sector. It is of paramount importance that we achieve cost parity between a hydrogen bus and a diesel bus, and at the moment such parity is predicted to happen this decade, but we would rather have that sooner than later, and if those 4,000 buses were hydrogen buses, I am told that the scales involved would mean parity with diesel buses.
In addition, it is essential that we reform the bus service operators grant to focus only on green fuels such as hydrogen, as we currently spend £600 million per year incentivising the running of diesel buses. Taking this decision would not cost the taxpayer a penny. We must also reform the renewable transport fuel obligation. A simple amendment to this would allow any existing renewable energy resource to be used, and again it would not cost the taxpayer any money. This would significantly increase private investment and stimulate the creation of new jobs in the production of green hydrogen for transport.
The HGV sector is the highest emitting of all commercial road transport with regards to absolute CO2 emissions. The majority of commercial vehicles in this category are still powered by diesel, and electrification, as I have mentioned, is not suitable for such heavy long-distance vehicles. Hydrogen-fuelled HGVs had been found to be a more cost-effective option in terms of the infrastructure costs, with a cumulative capital expenditure cost of £3.4 billion in 2016, compared with £21.3 billion for battery electric vehicles—so a lot cheaper. Hydrogen HGVs have already been trialled in the US and parts of Europe, and they are likely to be widely available in the 2020s.
On our railways, a hydrogen-powered train from the University of Birmingham recently travelled on Britain’s rail network for the first time. We are looking to lead the world in rolling out more hydrogen trains. In the aerospace sector, British company ZeroAvia has conducted the world’s first hydrogen-powered flight, over Bedfordshire, and in 2021 Aeristech will provide a fuel compressor that will make it possible to deliver the power output needed for even the heaviest industries and vehicles, such as aeroplanes. In shipping, UK shipbuilders are already working on cutting-edge zero-emission ferries, and we must increase our international co-operation on hydrogen to achieve the decarbonisation of routes globally.
Beyond transport, hydrogen can also be used to decarbonise home heating, given that home heating currently amounts to about 20% of national emissions. The UK is leading the way once again, with HyDeploy conducting the world’s first trial of a 20% hydrogen blend in the gas grid, H21 and H100 leading groundbreaking tests of 100% hydrogen in the gas grid, and Worcester Bosch and Baxi producing the world’s first hydrogen-ready boilers, so we are already developing this technology in this country.
UK innovation in hydrogen is further advanced by Johnson Matthey’s role as one of the global leaders in fuel cell development and components in transport. In fact, its technology ends up in roughly a third of fuel cells globally. I stress to the Government that this is an opportunity for us to corner the hydrogen market in the way that China has dominated the battery market. We can take a world lead on this, and we should—we have the right situation.
Another great British company is ITM Power, based in South Yorkshire, next to my constituency. It is involved in most hydrogen transport products in the UK, and it has indicated that it wishes to open a large hydrogen refuelling station and a network across the country. We must ensure that we have a strong domestic programme to support this, particularly in the bus and HGV sectors. If we act with pace and ambition, with collaboration between industry and Government, we can utilise our natural resources, technological know-how and innovative entrepreneurial spirit to spend taxpayers’ money more efficiently than our competitors and stimulate much greater private investment, economic growth and carbon reductions than any other country on the planet.
I have four policy asks of the Minister. The first is to set ambitious targets for the mass commercialisation of hydrogen technology. Hydrogen technologies across all categories have been used extensively in real-world situations across the world for many years. The opportunity now exists to set targets for mass deployment and commercialisation of these technologies across the UK over the coming decade, as other countries have already started doing. For example, Japan is aiming for 200,000 hydrogen fuel cell vehicles on the road by 2025 and 800,000 by 2030. It is also aiming for 1,200 hydrogen buses by 2030. South Korea is aiming for 100,000 hydrogen fuel cell vehicles on the roads by 2025 and 60,000 hydrogen buses by 2040. The world is waking up to hydrogen, and so should we.
The second request is to stimulate supply and demand in parallel. We can steal a march over other countries by setting inspirational, investment-stimulating goals for the production of hydrogen and do so in a manner that maximises the UK’s natural resources, academic skills, world-leading manufacturing and experienced workforce. The Prime Minister has set a target for a minimum of 5 GW of hydrogen production by 2030. Let us set ambitious demand-side targets for buses, trains and cars to ensure that we make full use of that.
The third ask is to focus initially on regional clusters—for example, in Rother Valley. The UK’s hydrogen economy must be built up step by step, and we cannot make this transition instantly. The Government should focus initially on regional clusters that are most suited to hydrogen production and usage and on technologies that can be implemented quickly, scaled up effectively and suit the local skills, geography and decarbonisation priorities. The announcement of a hydrogen transport hub in Teesside is welcome, and I hope that we will see more hydrogen hubs pop up soon—across the north but also in Scotland, Northern Ireland and Wales.
The fourth ask is to ensure that relevant Government Departments work collaboratively. Hydrogen policy covers many different Departments. It requires strong local leadership from metro Mayors, council leaders and local enterprise partnerships to be delivered. All the devolved Administrations are developing their own hydrogen strategies.
I appreciate the hon. Member giving way again; he is being very generous. I am listening closely to his four points. I may have missed it, but I am not sure whether he mentioned his preference for green or blue hydrogen, and I would be grateful if he expanded on whether he feels that green hydrogen is ultimately the goal that we all seek to achieve.
I believe the hon. Member missed the earlier part of the debate, when I touched on green and blue hydrogen. We all want green hydrogen eventually, but it is blue to start off with, with carbon capture and storage.
I urge the Government to bring forward another world first: a hydrogen political working group consisting of representatives from the UK Government, devolved Administration Ministers, Mayors and council leaders. This group can ensure that hydrogen policy across the UK is co-ordinated and implemented at pace.
We must act quickly and decisively to avoid being left behind by international competitors. In the past few months, Germany has committed €9 billion to hydrogen, and France and Portugal have committed €7 billion. The European Union is planning hundreds of billions of euros in investment in hydrogen technology. Australia, China, South Korea, Japan, Canada, Norway, Chile and many other countries around the world see hydrogen as critical to their immediate economic growth and long-term net zero goals. The UK must make its move now if we are to pip those countries at the post. They have announced this money. Let us get the money on the ground first and develop it.
Overall, about 20 countries that collectively represent about 70% of global GDP have announced a hydrogen strategy or a road map as a key pillar of their decarbonisation ambitions. We have only to look to the race for dominance in the battery industry to see why we cannot allow ourselves to fall behind today. For instance, today there are 136 battery mega-factory plants in operation or being planned. Some 101 of those are in China, and eight are in the USA. China is opening almost one new mega-factory every single week. The UK has well and truly lost out in the battery industry, but we are still in the race for hydrogen, and we can still win.
It is apparent why so many countries are clamouring to pursue a hydrogen transport agenda. The global hydrogen economy is set to be worth $2.5 trillion and create 30 million jobs by 2050. The economic benefits for the UK are huge, especially for industrial areas, such as my constituency of Rother Valley. Here in the UK, the Hydrogen Task Force believes that hydrogen can add £18 billion in gross value added by 2035 and support 75,000 additional jobs. More immediately, businesses have told the Treasury that it has £3 billion-worth of shovel-ready private investment awaiting the right policy frameworks and commitment from the Government.
That is fantastic news for constituencies in the northern powerhouse and the devolved nations. The Zero Carbon Humber project is a fantastic example of the potential of so-called hydrogen hubs, which I envisage in areas such as the Rother Valley and across the red wall. The Humber is the largest carbon-emitting industry cluster in the UK, and like South Yorkshire, much of the Humber’s economy is built on manufacturing, engineering and the energy sector. A partnership of 12 major organisations and a bid to the Department for Business, Energy and Industrial Strategy has resulted in the creation of an ambitious project to make the Humber the world’s first net zero carbon industrial cluster, supporting new industry and encouraging factories.
Addressing jobs first and foremost, the potential for a hydrogen revolution in South Yorkshire to rival the coal industry is immensely exciting. We have already made great strides in establishing ourselves as a national hub for the production of green hydrogen. Rother Valley’s manufacturing expertise remains second to none, and our ambition and drive are matchless. It is those skills that we hope to redeploy in the green revolution, and as such there is no better place to serve as the hub of the hydrogen industry.
For instance, I have been supporting the upcoming opening of the world’s largest electrolyser factory, operated by ITM and located in Meadowhall, Sheffield, which is on the border of my constituency. Hydrogen storage cylinders are also manufactured nearby. Rotherham, part of which is in my constituency, is home to England’s most northerly hydrogen refuelling station. The region has an onshore wind sector with the potential to expand. It is key to the production of green hydrogen, and our local city of Sheffield has two major district heat networks. Recently, I met the University of Sheffield’s Advanced Manufacturing Research Centre, which is a world-leading hub of research and innovation in technologies such as hydrogen.
However, that is only the beginning. As we attract more investment and the local hydrogen industry grows, more companies will want to take advantage of our infrastructure, creating manufacturing jobs, graduate jobs and supply chain jobs alike. In turn, South Yorkshire stands to reap high economic returns that will rejuvenate the local economy. Indeed, I intend to turn Rother Valley into Britain’s hydrogen valley.
I conclude my speech by emphasising the importance of using hydrogen as one part of our carbon-free transport future. No one technology alone is the answer, because each option is at a different stage of development and the economics of each are different depending on the mode of transport. The case for hydrogen is irrefutable, particularly for heavy duty, long-distance vehicles such as heavy goods vehicles and buses. Decarbonising those modes of transport is vital to meeting our net zero targets.
A world-leading hydrogen industry will boost the local and national economy, providing an uplift in these challenging times, and bolster UK plc as we export our expertise and technology around the world. The UK has all the tools required for leading the hydrogen revolution. We must ensure that we seize the moment and take our rightful place as the capital of hydrogen transport. I look forward to working with the Minister and the Government as we march towards a cleaner, greener hydrogen future for all parts of the United Kingdom.