UK Gov cuts support for overseas fossil sector in favour of green technologies

UK Gov cuts support for overseas fossil sector in favour of green technologies

Effective today (31st March), the UK Government has cut support for the fossil fuel energy sector overseas as it looks to exploit new and emerging technologies such as hydrogen.

A landmark move for the country, the decision is in favour of clean energies and expedites the shift to supporting green technology, whilst creating jobs across the UK and driving growth in the industry.

First announced back in December (2020), when the UK Prime Minister Boris Johnson opened the Climate Ambition Summit, co-convened by the United Nations, the UK and France, the change has been months in the making.

The effort, however, by no means marks the first major move made by the UK Government in support of a green revolution as it makes strides towards net zero by 2050. Before UK PM Boris Johnson announced the decision to cut fossil fuel support overseas, he also released his 10-Point Plan.

Unveiled in November (2020), the Government’s 10-Point Plan for a green industrial revolution, promised a multi-billion package of investment across the green economy designed to create and support up to 250,000 new jobs, whilst making strides towards net zero by 2050.

The plan also proposed to generate 5GW of low carbon hydrogen production capacity by 2030 – enough to power about 1.5 million homes – for industry, transport, power and homes, and aims to develop the first town heated entirely by hydrogen by the end of the decade.

To deliver on the above, the Prime Minister at the time announced up to £500m, including trialling homes using hydrogen for heating and cooking, starting with a hydrogen neighbourhood in 2023, moving to a hydrogen village by 2025, with an aim for a hydrogen town.

Read more: UK PM backs hydrogen in his 10-point green plan

Whilst the cutting of support for overseas fossil fuels, and a heavy focus on green energies from the UK Government, may suggest hits to the fossil energy workforce here in the UK, that will not be the case due to another major announcement last week.

Exactly a week ago (24th March), the UK Government vowed that highly-skilled oil and gas workers and the supply chain will not be left behind in the transition to a low carbon future – a move that will be supported by the Government and trade unions.

Through the package of measures, the deal is expected to cut pollution by up to 60 million tonnes by 2030 including 15 million tonnes from oil and gas production on the UK Continental Shelf – the equivalent of annual emissions from 90% of the UK’s homes – while supporting up to 40,000 jobs across the supply chain.

Not only will the deal support existing companies to decarbonise in preparation for a net zero future by 2050, but it will also create the right business environment to attract new industrial sectors to base themselves in the UK, develop new export opportunities for British business, and secure new high-value jobs for the long-term.

Industry reaction

Welcoming the moves made by the UK Gov, Celia Greaves, Executive Officer at the UK Hydrogen and Fuel Cell Association, said, “Getting to net zero is a huge challenge, and any actions that help us on the way are welcome. As fossil fuel generation falls and renewables increase, so does the scope for green hydrogen production.”

“With hydrogen seen as a key component of the energy transition in the UK, we are well placed to contribute, with system and project developers scaling up to meet both domestic and export markets.”

“In the short to medium term, while fossil fuels remain in the mix, further carbon reductions will be possible through the conversion of natural gas to hydrogen with carbon capture and storage.  Again, the UK has growing capability to support not only our own decarbonisation ambitions, but also those of other countries.”

Adam Bond, CEO of AFC Energy, also commended the decision, adding, “The UK Government’s landmark decision to end fossil fuel subsidies overseas is expected to see a reallocation of billions of pounds into new sustainable technologies in support of the country’s net zero aspirations.”

“The UK already offers local and overseas markets some of the most cutting-edge hydrogen technologies and so today’s news could provide a significant boost to both the production and utilisation of hydrogen in the UK, creating thousands of high-value green jobs across the UK and driving international growth and export opportunities for the industry.”

“This provides a great opportunity for the Government to not only focus on the production of hydrogen but also how it can be deployed in key applications to help rapidly decarbonise industry. Reducing carbon emissions in sectors such as construction will be crucial in enabling the UK to reach its net zero objectives and hydrogen power systems, such as those produced by AFC Energy, can help move industry away from highly polluting diesel generators.”

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