A new snapshot of the UK hydrogen economy shows a sector technically ready to scale but increasingly constrained by policy delays and weak demand signals.
The State of the Hydrogen Nation report from the UK Hydrogen Energy Association finds supply chains forming across production storage transport and equipment manufacturing.
Companies say the issue is no longer whether hydrogen works but whether government will move fast enough to create real markets.
More than four in five hydrogen businesses expect UK investment to grow or at least hold steady over the next 12 months.
At the same time more than 40% say confidence has deteriorated compared with a year ago as funding rounds slip and decisions stall.
The report shows hydrogen has moved beyond pilots into bankable projects. Developers and manufacturers say private capital is available but is sitting on the sidelines without credible long-term offtake.
Demand is now the single biggest barrier. Firms say the lack of clear signals on where hydrogen will be used and supported is delaying final investment decisions even where supply is ready.
Industry sees the strongest near-term role in heavy industry transport and power system balancing. Residential heating barely features reflecting a shift towards prioritising sectors that are hardest to electrify.
Infrastructure costs planning delays and fragmented policy across departments are also cited as major constraints. Businesses warn that without faster coordination the UK risks falling behind countries that are locking in hydrogen demand.
Emma Guthrie Chief Executive of the UK Hydrogen Energy Association said: “This report shows a sector that is ready to deliver but increasingly frustrated by uncertainty.” She added: “Hydrogen businesses are prepared to invest build and create jobs in the UK but they need clear consistent signals on demand and deployment to move projects forward.”
On jobs the report estimates hydrogen could support around 17,000 UK roles by 2030 if projects progress.
Skills manufacturing capacity and technology are already in place waiting for decisions that turn strategy into delivery.
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