The University of Manchester’s new publication, On Hydrogen, provides expert analysis on the sector’s challenges, while insights from industry voices at StocExpo 2025 shed light on the financial, technical, and policy hurdles that must be overcome.
On Hydrogen covers critical areas such as hydrogen production, storage, decarbonisation of industry and transport, and the future role of hydrogen interconnectors, offering expert analysis, evidence, and policy recommendations to address the UK’s key hydrogen policy challenges.
The foreword by Baroness Brown of Cambridge, Chair of the House of Lords Science and Technology Select Committee, warns that “the hydrogen bubble has burst.”
She writes how hydrogen has been regarded as a “silver bullet” for decarbonisation of “almost everything” adding: “The trouble with bubbles is that once they have burst, it takes time for industry, governments and investors to regain confidence and take the subjects seriously again”.
Despite these challenges, Baroness Brown asserts that green hydrogen remains crucial for industries like steel production and sustainable fuel manufacturing.
The crossbench peer – who also serves as Chair of the Carbon Trust, and the Adaptation Committee of the Climate Change Committee – suggests that hydrogen can be a “green growth opportunity for the UK”, citing the many ingredients the UK has to make it work including “ambitious net zero commitments and policies; including “some serious oil industry players who need an alternative to fossil fuels.”
The role for hydrogen
The report suggests that rather than replace fossil fuels in the short term, hydrogen could complement existing energy sources, helping to lower emissions from transport and industrial applications.
Industry impact
Hydrogen presents both challenges and opportunities for fossil fuel producers and distributors.
The report highlights that over 90% of hydrogen today is fossil fuel based (grey hydrogen). This process releases large amounts of CO2.
Blue hydrogen adds carbon capture and storage (CCS) to the grey hydrogen process and is being explored as a transitional solution. However, concerns remain about its actual environmental benefits, as the effectiveness of CCS technology remains uncertain.
Green hydrogen (produced via electrolysis using renewable electricity) is the only truly low-carbon option but is currently expensive and limited in supply.
The report suggests that while battery-electric vehicles (BEVs) are becoming dominant for light-duty transport, hydrogen is being explored for harder-to-electrify heavy-duty transport such as HGVs, shipping, and aviation.
Hydrogen fuel cell vehicles are being considered for heavy transport, including freight trucks, buses, and trains. However, limited hydrogen refuelling stations and high fuel costs are barriers.
Hydrogen-derived e-fuels could play a role in aviation and shipping, but scaling up production requires major investment in infrastructure and renewable energy.
Distribution challenges
Unlike liquid fossil fuels, hydrogen is difficult to transport and store due to its low energy density and leakage risks.
The report highlights that hydrogen storage and distribution remain a major technical challenge, with underground storage being a potential long-term solution.
The report also suggests that the UK could develop hydrogen pipelines and interconnectors to facilitate distribution.
Policy considerations
The transition to hydrogen requires significant policy and investment support. Policy mechanisms such as carbon pricing and subsidies will be crucial in making hydrogen economically viable compared to fossil fuels.
The report suggests that more stringent regulations are needed to ensure that only truly low-carbon hydrogen (green hydrogen) is incentivised.
Diversification
As policy mechanisms evolve, major oil and gas companies are already investing in hydrogen, viewing it as a long-term revenue stream. While hydrogen is unlikely to fully replace fossil fuels in the near term, gradual displacement in certain markets is reshaping investment strategies.
Hydrogen was also under scrutiny at StocExpo 2025, where industry leaders and energy transition experts examined its future.
Eugenia Belloni Pocorob, Lead H2 and CC(U)S for the Netherlands at BP, Amit Rao, principal consultant at S&P Global and Matt Wilson, Head of New Energy Markets at Navigator Terminals considered the financial, technical and geopolitical factors influencing hydrogen’s adoption and highlighted the critical role of policy and investment.
Hydrogen’s role in decarbonisation
Eugenia Belloni Pocorob, highlighted its importance in reducing refinery emissions. “Decarbonising refinery fuel is essential, and low-carbon hydrogen provides a clear pathway,” she said. However, she acknowledged the formidable hurdles. “The technical and financial challenges remain substantial, but the opportunity for emissions reduction is undeniable.”
As mentioned above, the transport sector is also exploring hydrogen’s potential. Amit Rao noted its long-standing use in industrial applications but pointed to new areas of demand. “We are seeing airline manufacturers investigating pure hydrogen solutions beyond sustainable aviation fuel (SAF). It may seem far-fetched now, but technological advances happen rapidly,” he observed.
Investment and policy uncertainty
Despite its promise, the high cost of carbon capture and storage (CCS) and hydrogen projects remains a significant barrier. “The scale of capital required for CCS projects is enormous,” said Rao. “We have already seen major industry players reconsider their green commitments. The question is: where will the funding come from, and who will drive the transition?”
Investor hesitation is another factor slowing progress with Belloni Pocorob pointing that “We need a different type of investor – one willing to take a long-term view.”
Government intervention has played a decisive role in advancing early-stage projects. Matt Wilson cited the UK’s approach, where government-backed competition frameworks have helped de-risk investments. “By aligning the entire value chain, these initiatives have made projects more viable,” he explained. “Future developments will build on this foundation.”
Geopolitical headwinds and the US factor
The trajectory of hydrogen investment is increasingly being shaped by global political dynamics. Rao warned that shifts in US policy could have far-reaching consequences. “We need to wait out the Trump presidency to gain clarity on the long-term outlook. Over the next four years, we are likely to see renewed trade conflicts – not just with China, but across the board. The US is moving towards decoupling from global markets, which will have profound implications for European industry,” he said.
Rising defence spending in Europe could also reshape energy transition priorities. “If governments allocate 3% or more of GDP to defence, other sectors will inevitably face budgetary constraints,” Rao cautioned.
Cautious optimism
Despite these challenges, the panel remained cautiously optimistic. Belloni Pocorob noted that “We may have gone from 30 projects to fewer than five, but the fact that some are now moving into construction is significant. The energy transition is not just theoretical – we are starting to see real implementation,” she said.
Wilson echoed this sentiment, highlighting progress in the UK. “The projects we have in place are gaining traction. The policy framework is set, and the risk profile has improved. This momentum will carry through to SAF and other hydrogen-linked sectors,” he concluded.
Hydrogen remains a work in progress—full realisation of its potential will depend on sustained investment, targeted policy support, and overcoming economic and geopolitical challenges.
The panel at StocExpo:
Eugenia Belloni Pocorob: Lead H2 and CC(U)S for the Netherlands at BP
Born and raised in the Italian Alps, Eugenia pursued a humanistic education and subsequently obtained a degree in Chemical Engineering from Politecnico di Milano, followed by a PhD in Industrial Catalysis from KTH, Stockholm.
Relocating to the Netherlands, she first worked with Shell Chemicals in Pernis before moving to BP Rotterdam Refinery. During her 20 years of service at BP, Eugenia has gained extensive experience in various areas of the refining business. In recent years, she has focused specifically on leading the strategic development of transition engines and decarbonisation, with a particular emphasis on green and low-carbon hydrogen and their integration into emerging integrated energy hubs.
Matt Wilson: Head of New Energy Markets at Navigator Terminals
Matthew Graduated from Teesside University with a BEng (Hons) in Chemical Engineering in 2010 and is the Head of New Energy Markets for Navigator Terminals UK. Matthew is focussed on addressing the demand for storage and handling of new energy carriers and emissions reduction solutions in evolving markets, for which Navigator Terminals are geographically and technically well positioned to become a leader in the future.
Matthew joined Navigator Terminals from Johnson Matthey, where he gained more than 12 years’ experience in the oil and gas and chemicals market.
Amit Rao: Principal Consultant at S&P Global
Amit is a Senior Consultant in S&P Global – Oil Markets and Downstream (OMDC). He has ten years of professional experience working in the Oil and Gas industry, and is based in S&P Global’s Paris office. In his work at S&P Global, Amit has been focusing on consulting activities in the oil midstream and downstream sector.
Amit’s activity has been particularly focused on delivering commercial and technical due diligence reports related to storage portfolio assets in both the refined products and chemicals sectors. As part of these projects, he has been leading the analyses related to the technical conditions, market outlook, price and tariffs forecasting, contract review and financial modelling.
Before S&P Global, Amit was working at IFP Energies Nouvelles where he led the inhouse LNG intelligence and developed analysis on the LNG market supply, demand, and infrastructure.
Image credit: iStock, Daniel Balakov
