Blog: Unlocking hydrogen’s potential: Why the UK must invest in supply chains now

Why supply chains matter – and why we need to act fast

Hydrogen is a sector where production, infrastructure and demand must all scale in tandem. But as Clare explained, none of that will happen smoothly without the right supply chain ecosystem behind it.

“It’s a really interesting question,” she said. “And one where we want to learn from the mistakes of the past.”

She pointed to offshore wind as a cautionary tale. While the UK is a global leader in deployment – second only to China – it has failed to capture value from the technology’s supply chain. “Almost all of the high-value stuff isn’t made in the UK,” she noted. “We import it all.”

Hydrogen presents an opportunity to do things differently. But only if we plan smartly, invest early and support those parts of the supply chain where the UK has a real chance to lead.

A strategic approach to building UK capability

Last September, Hydrogen UK published a report on UK supply chain strategy, analysing which parts of the hydrogen value chain could – and should – be anchored in the UK.

The message was clear: the UK doesn’t need to lead in everything. But it does need to be selective and strategic.

“You’re not going to be a global leader in absolutely every part of the hydrogen sector,” Clare explained. “But you need to be really smart and targeted over the things that you go after.”

She said through detailed analysis, Hydrogen UK had identified four key areas of opportunity – areas where the UK either has an existing foothold, or where the global race is still open:

• Electrolyser stacks
• Power electronics
• Hydrogen network pipes
• Compressed hydrogen storage tanks

These aren’t just technical components – they’re fast-growing markets with export potential and skilled job creation built in. But realising those benefits means more than just identifying them. It means actively supporting them.

“You need to be investing and utilising and trying to support those parts of the supply chain,” said Jackson.

Investment, incentives and collaboration

So how can we turn potential into capability?

Hydrogen UK’s report sets out a range of recommendations to boost domestic supply chains. These include:

• Making best use of existing hydrogen business models to require UK supply chain assessments
• Introducing a bonus mechanism to reward projects that include UK-based suppliers
• Establishing a central supply chain funding body to provide strategic support and attract foreign direct investment
• Aligning the UK’s skills strategy with supply chain priorities

Clare emphasised the importance of that last point: “That’s hugely important… to try and make sure those two things are aligned and not developed in isolation.”

Hydrogen UK is already working closely with the Hydrogen Skills Alliance and other Government-backed programmes to help coordinate this. But a more joined-up approach is needed if the UK is to avoid fragmentation and move at pace.

Why hydrogen costs are tied to supply chains

Another key takeaway? The role of supply chains in influencing the cost of hydrogen.

“If you have infrastructure in place, if you have networks and storage in place, we can unlock hydrogen in the power sector, unlock scale and get costs down,” Clare said. “It’s hugely important that we’re investing in that.”

If the UK can manufacture more of its own hydrogen infrastructure and components – from electrolysers to storage tanks – it will be less exposed to international price volatility. That in turn will make hydrogen more affordable for UK industry, helping to scale demand and speed up deployment.

Don’t wait – act now

Despite having a clear strategy and widespread industry support, progress has been slow. One of the biggest barriers? Policy and financial certainty.

Clare tells the podcast this is where she would focus her efforts if given a magic wand.

“If I was going to use my magic wand, it would be to ensure that the Government, and in particular, the treasury, had a perfect understanding of the opportunity of hydrogen,” she said.

“Because then I think they’d make the right decisions in the spending review – around accelerating hydrogen production, accelerating infrastructure and accelerating investment in supply chains.”

The call to action is simple: the UK has a window of opportunity, but it won’t stay open forever. Global competition is heating up, with countries like Germany, the US and South Korea pushing hard to localise hydrogen supply chains and attract investment.

If the UK delays, it risks falling behind.

Final thoughts

Hydrogen is often described as a ‘whole-system’ technology. It touches every part of the energy value chain – from electricity and gas networks to heavy industry and transport. Its success depends not just on engineering, but on coordination, confidence and early backing from both Government and the private sector.

Building out the UK’s hydrogen supply chain is more than just an industrial strategy. It’s a way to create skilled jobs, reduce emissions, strengthen energy resilience and support long-term economic growth.

But without targeted investment and a joined-up national approach, those benefits will go elsewhere.

Hydrogen UK’s message is clear: the time to act is now.

As Clare put it, “We’ve got some ideas as to what we need to do – but we need to get on and do them.”

To listen to the full podcast, click on the link below.

Unlocking the UK’s net zero opportunity podcast

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