The push to net zero - Can project finance fuel investment in the Hydrogen market?

(Lexology, London, 18 November 2021) Discussion of hydrogen fuel has become increasingly prevalent over the past few years. The increased push to reach net zero targets, as highlighted in the Government's newly published 'Net Zero Strategy: Build Back Greener', has brought hydrogen back into popular discussion. New technological innovations look to be making hydrogen energy cleaner, cheaper and more accessible for industry. This may be opening new doors for the element. How will this unprecedented scale of energy innovation investment be funded? Historically, groundbreaking energy technologies have relied upon significant government subsidies, supported by bankable project financing. Can hydrogen replicate the project finance model? If not, where will the money come from? The current funding for investments into hydrogen technologies is found largely in government or university research and development grants and corporate venture equity. There is very little hydrogen being funded through debt finance. Hydrogen, however, is an energy source that still requires significant investment; both in production (for example, developing effective and cost-viable carbon capture and storage facilities to accompany blue hydrogen production) and in delivery and use (for example, in getting gas infrastructure and networks, consumer products and energy storage ready to facilitate a hydrogen market).