RenewableUK has welcomed the governnment’s consultation on the future of the climate change levy in regards to making clean hydrogen.
Labour have opened a consultation on how the levy should operate, as more electricity is used to generate cleaner hydrogen and if the tax would be a barrier to the planned expansion of clean power.
Director of Future Electricity Systems Barnaby Wharton said: “We’re delighted to see this reform, which will help to reduce the cost of green hydrogen for businesses and billpayers. Our Splitting the Difference report released in January highlighted the case for exempting electricity used to make green hydrogen from the Climate Change Levy as part of a package of measures to cut green hydrogen production costs by 58%.
“Green hydrogen generated in high-tech electrolysers using renewable electricity has an important role to play in decarbonising sectors like steel, chemicals and shipping, which are hard to electrify.
“It can add vital flexibility to our energy system, as it can be stored and used whenever it’s needed, providing long-duration energy storage which helps to balance and strengthen our energy system by making the best use of the vast quantities of electricity we’re now generating from renewables”.
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