To support the UK Government’s target of achieving 10GW of low-carbon hydrogen production capacity by 2030, the Net Zero Hydrogen Fund was introduced to provide upfront capital funding, while the Hydrogen Business Model was launched to offer revenue support. Both schemes are currently limited to green hydrogen suppliers to encourage low-carbon hydrogen production projects.
However, as with any emerging market, suppliers are grappling with legal and practical uncertainties, including establishing a supplier-offtaker relationship that can successfully navigate unique scenarios across the hydrogen supply chain.
The hydrogen offtake agreements are being introduced to regulate the sale, purchase, storage and supply of green hydrogen in the absence of widely accepted market practices. While each offtake agreement is likely to initially vary project-to-project at this early stage, broadly we expect to see them deal with the same key issues.
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