10 August 2026
Early announcements from Prime Minister Andy Burnham have signalled that energy affordability, economic growth and industrial renewal will sit at the heart of his agenda, with important implications for businesses investing in the UK's energy transition.
In this article, we examine what the government's early decisions tell us about its priorities, where further policy clarity is still needed, and what this means for the future of hydrogen, biomethane and carbon capture and storage (CCS).
The New Administration: Early priorities and policy signals
Having been sworn in as Prime Minister on 20 July following Keir Starmer’s resignation, Andy Burnham’s first policy move was a VAT cut on household electricity bills. He reduced the rate from 5% to 0% for six months from 1 October, aimed at providing immediate support on household energy costs. Prior to coming into office, he also set out a 10-year programme focused on reindustrialisation, reform of essential utilities, and regional regeneration. Together, these early moves show that the energy sector is firmly within Burnham’s policy priorities, with affordability, infrastructure, and economic growth closely linked.
His appointment of Miatta Fahnbulleh as Energy Secretary also shows his commitment to the sector. Her previous role as DESNZ’s energy consumers minister, and her involvement in developing the Warm Homes Plan, give her strong experience as she takes on the department’s top role. One of her first actions will be to find £2 billion of savings over the next four years to fund parts of the Defense Investment Plan, although the government has confirmed that the clean power mission and renewables expansion will remain protected, with further detail expected in the Autumn.
Overall, Burnham brings a strong track record on net zero from his time in Greater Manchester, where he positioned decarbonisation as an opportunity for jobs and investment and backed initiatives including the international Fossil Fuel Treaty. More recently, he has expressed support for new North Sea oil and gas licences, while his position on the future of gas, hydrogen and biomethane remains less defined. This creates an early opportunity for industry to engage with the new government and help shape the role of low-carbon gases in its wider growth agenda.
The government's early signals are encouraging in that they recognise the close relationship between energy policy, economic growth and national infrastructure. However, delivering on these ideas will require clear, long-term policy frameworks that provide confidence for investors, developers and supply chains. As technologies mature and move towards commercial deployment, certainty will be just as important as continued innovation if the UK is to maintain momentum in its decarbonisation journey.
What industry needs
In the gas-decarbonisation space, the challenge for government will be to build on current momentum and turn existing progress into long-term investment and deployment. If Burnham’s ambition to reindustrialise the UK is to succeed, investors and supply chains will need greater certainty over how low-carbon gases fit within the country’s long-term energy strategy. This is particularly important for sectors that are difficult or uneconomic to electrify, where hydrogen, biomethane and CCS are likely to remain critical decarbonisation options.
Hydrogen has built strong momentum over the past years, with contracts awarded through the Hydrogen Allocation Rounds for projects across the UK and real-world trials such as the H100 Fife project providing valuable operational evidence. Recent milestones, including Centrica and National Gas’ UK-first trial blending 2% green hydrogen into the National Transmission System for power generation at Brigg, demonstrate that hydrogen can be integrated safely into existing infrastructure.
The priority now needs to be the long-awaited Hydrogen Strategy refresh. International examples from Germany and the Netherlands show the value of focusing hydrogen on hard-to-electrify sectors, creating strong demand signals and allowing regulation to evolve alongside deployment. For the UK, clearer decisions on hydrogen blending, hydrogen’s role in heating and industrial use, and a roadmap beyond 2030 would provide investors and supply chains with greater confidence. While many initiatives focus on the supply side, the question of where demand will come from will also need to be answered if the strong momentum is to continue.
For biomethane, while the extension of the Green Gas Support Scheme commissioning deadline to 2030 provides additional time for existing projects to progress, the sector now needs clarity on what comes next. The Future Biomethane Policy Framework will be critical in setting out the next phase of support once the scheme closes to new applicants. Publishing this alongside the rollout of food waste collections in England would provide confidence for future investment and help maximise new sources of feedstock.
CCS is similarly at an important stage. Projects in Teesside and the North West have reached financial close and are moving into construction, supporting jobs and helping industrial sectors such as cement and energy-from-waste reduce emissions. However, with more than 100 additional projects in development, the sector needs a clearer route to future deployment, including allocation frameworks for new clusters and continued development of carbon storage and removals markets.
Across all three technologies, the common requirement is long-term policy certainty. Without clear market signals, projects, supply chains, and investment decisions risk being delayed, limiting the UK's ability to capitalise on the economic opportunities of the energy transition.
The path forward
For Burnham’s government, the opportunity is clear. Publishing the Hydrogen Strategy refresh, confirming the Future Biomethane Policy Framework and providing CCS with a clearer route to market would build on progress already made and support the government’s wider ambitions on growth and reindustrialisation.
Alongside improving energy affordability, these measures would provide the long-term certainty needed to unlock private investment, strengthen domestic supply chains and ensure the UK remains competitive in the industries that will underpin the low-carbon economy.
The months ahead will be an important test of the government's commitment to delivering a clear and investable energy strategy. Decisions on hydrogen, biomethane and CCS will shape the pace of decarbonisation for years to come, making continued collaboration between government and industry essential if the UK is to deliver both its net zero ambitions and its wider economic growth objectives.
At Xoserve, we will continue work with industry and government to ensure the data, insights and collaboration needed to support a secure, affordable and decarbonised energy system are in place.
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