Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether she has made an assessment of the potential merits of fiscal incentives to encourage capital investment in (a) hydrogen and (b) fuel cell manufacturing facilities.

The Chancellor of the Exchequer is supporting a range of incentives to encourage capital investment in hydrogen. The Government has awarded contracts to 11 projects through the first hydrogen allocation round and £500mn was allocated for the development of the first hydrogen transport and storage network through the spending review.

At Spring Statement 2025, the government committed to removing Climate Change Levy costs from electricity used in electrolysis to produce hydrogen. This will lower costs and support the growth of low carbon hydrogen production, which will play an important role in decarbonising hard-to-electrify industrial sectors.

UK Export Finance also aims to deliver £10bn in clean growth financing by 2029; DRIVE35, the government’s programme of capital and R&D funding for the automotive industry, will provide £2.5bn for zero-emission vehicle manufacturing, including fuel cells; and the Aerospace Technology Institute Programme offers grants to UK fuel cell manufacturers investing in UK-based research and development.