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18 Aug 2021

MPA welcomes UK hydrogen strategy but warns costs must be shared

The Mineral Products Association (MPA) has cautiously welcomed the Government's proposals to accelerate the development of a low carbon hydrogen economy but has warned that the costs of the production, transmission and distribution need to be shared by the whole UK economy.

Published on 17 August, the UK Hydrogen Strategy sets out how progress will be made over the next decade to deliver 5GW of low carbon hydrogen production capacity by 2030 for use across the economy, as part of the UK’s drive to achieving its net zero targets. A consultation has also been launched to identify how the current cost gap between low carbon hydrogen and fossil fuels can be overcome.

Dr Richard Leese, Director of Industrial Policy, Energy and Climate Change at the MPA said:

“The publication of the Government's strategy is a welcome first step in the UK’s journey to developing hydrogen as an alternative energy option, which will play a critical role in our collective journey to a net zero society.

“However, it’s now critical that energy intensive industries including the UK cement and lime sector, which are essential for our economy and way of life, are not unduly penalised by additional policy costs for the production, transmission and distribution of hydrogen on top of already high electricity costs and carbon related environmental taxes. Hydrogen development costs need to be shared by the wider economy to encourage acceleration of the technology and ensure industrial gas users and hydrogen generated power users are not placed at any further international competitive disadvantage.

“Fuel switching away from fossil fuels, including the potential to adopt hydrogen technology, represents one of seven key levers in MPA UK Concrete’s Roadmap to Beyond Net Zero which sets out the sector’s own commitments having already decarbonised by 53% since 1990. Our members have made huge strides in this area by using waste derived and biomass fuels to reduce emissions, however care needs to be taken by the Government to ensure that biomass resources are not diverted away from current industrial uses in the pursuit of hydrogen production.

“Our sector remains fully committed to advancing collaborative research and innovation to meet the industry’s climate change objectives, and it was pleasing to see the MPA’s world-first demonstrations of firing hydrogen at commercial fuel supply scale referenced in the Government's strategy.”

MPA is currently undertaking ground-breaking demonstrations of hydrogen as well as plasma technology, which are being partly funded by the Department for Business, Energy and Industrial Strategy (BEIS). These will demonstrate the potential of important technologies to reduce carbon emissions through fuel switching from fossil fuels in cement and lime production.

The projects follow a BEIS-funded feasibility study in 2019 which found that a combination of 70% biomass, 20% hydrogen and 10% plasma energy could be used to eliminate fossil fuel CO₂ emissions from cement manufacturing.

MPA has also welcomed the Government’s announcement of its £40 million Red Diesel Replacement competition to help develop diesel alternatives as part of the Net Zero Innovation Portfolio. Transitioning from diesel-run to zero-emission machinery and vehicles is essential as part of the mineral products industry’s route to net zero over the coming years.

However, MPA has repeated its calls for a delay in the removal of the red diesel rebate, scheduled for April 2022 and estimated to cost the mineral products sector alone around £100 million per year. There are currently no suitable alternatives to diesel-powered machinery, as demonstrated by the need for Government funding to encourage innovation, so removing the rebate can bring no environmental benefit.

The quarrying industry has a track record of investing in the best available technology over time and MPA is confident that operators will switch to zero carbon machinery when it becomes available.


About the Mineral Products Association:

The Mineral Products Association (MPA) is the trade association for the aggregates, asphalt, cement, concrete, dimension stone, lime, mortar and silica sand industries. With the merger of British Precast, and affiliation of the British Association of Reinforcement (BAR), Eurobitume, MPA Northern Ireland, MPA Scotland and the British Calcium Carbonate Federation, it has a growing membership of 520 companies and is the sectoral voice for mineral products. MPA membership is made up of the vast majority of independent SME quarrying companies throughout the UK, as well as the 9 major international and global companies. It covers 100% of UK cement and lime production, 90% of GB aggregates production, 95% of asphalt and over 70% of ready-mixed concrete and precast concrete production. In 2018, the industry supplied £16 billion worth of materials and services to the Economy. It is also the largest supplier to the construction industry, which had annual output valued at £172 billion in 2018. Industry production represents the largest materials flow in the UK economy and is also one of the largest manufacturing sectors.

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