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.