Delays to key UK hydrogen projects are putting up to 17,000 jobs and billions of pounds in private investment at risk, according to a warning from the Hydrogen Energy Association (HEA). In a letter sent to the government, the industry body said continued uncertainty over funding decisions and strategy updates is already damaging business confidence across the UK’s emerging hydrogen sector.
The HEA urged ministers to immediately publish the long-awaited results of the second Hydrogen Allocation Round (HAR 2) and clarify timelines for the next funding phase, warning that prolonged delays risk pushing projects, capital and skilled workers overseas.
Industry Calls for Urgent Clarity on Hydrogen Allocation Rounds
The Hydrogen Allocation Rounds are a Contracts for Difference-style subsidy mechanism designed to support low-carbon hydrogen production in the UK. Under HAR 2, 27 green hydrogen projects were shortlisted last year, raising expectations that financial support would soon follow.
However, no major announcements — including the awarding of subsidies — have been made since the shortlist was confirmed in April last year. In July 2025, the government said it was still carrying out due diligence and cost assurance checks, including technical and financial scrutiny and a detailed review of project cost data.
The HEA said the lack of progress has created uncertainty for developers and investors who are waiting for final decisions before committing capital.
Concerns Grow Over HAR 3 and Hydrogen Strategy Delays
Alongside HAR 2, the HEA is also pressing the government to publish the outcomes of the market engagement exercise for Hydrogen Allocation Round 3 (HAR 3). That exercise was first announced in December 2023, with officials indicating the results would be released alongside the formal launch of HAR 3 later this year.
The association warned that delays to HAR 3 risk compounding existing uncertainty, particularly for companies planning projects beyond the current funding round.
In addition, the HEA called for faster progress on the government’s updated Hydrogen Strategy, which ministers previously said would be published in autumn 2025. The UK’s original hydrogen strategy was released in 2021, and the sector has since grown rapidly amid global competition for clean energy investment.
Business Confidence Eroding Across UK Hydrogen Sector
The HEA said ongoing delays are already having tangible consequences for the industry. In its letter, the organisation warned that uncertainty is stalling investment decisions and undermining confidence among companies that had expected clearer policy direction by now.
HEA chief executive Emma Guthrie said each delay risks weakening the UK’s position in the global hydrogen market.
She said: “Every day of delay to HAR 2, HAR 3 and the Hydrogen Strategy refresh chips away at investor confidence, pushes projects, capital and skilled jobs elsewhere and risks a negative spiral of eroding business confidence.
“This is not about bureaucracy — it is about whether the UK chooses to lead or to watch opportunities drift offshore. The industry needs clarity now.”
Evidence Shows Jobs and Investment at Stake
The HEA has submitted a package of industry case studies to the government, highlighting projects already affected by delays. These submissions build on evidence from the association’s State of the Hydrogen Nation report, published last month.
Based on a survey of 142 UK organisations, the report found the hydrogen sector could support 17,000 jobs by 2030 if projects progress as planned. Longer-term analysis suggested that a core hydrogen network could unlock between £8bn and £13bn in additional private investment by 2050, provided policy support remains consistent and timely.
UK Competing in a Global Hydrogen Race
Governments across Europe, North America and Asia are accelerating hydrogen funding as part of wider net-zero and energy security strategies. Industry leaders have warned that delays in subsidy decisions and policy clarity risk leaving the UK behind competitors that are moving faster to support production, infrastructure and supply chains.
The HEA said swift action on hydrogen funding rounds and strategy updates is essential if the UK is to retain investor confidence, protect jobs and secure a long-term role in the global hydrogen economy.