Hydrogen Grant Funding in the UK: Complete Guide

Hydrogen is central to the UK's net zero strategy. The government's 2021 UK Hydrogen Strategy, updated by the 2023 Hydrogen Strategy Update, positions hydrogen as essential for decarbonising sectors that electricity alone cannot reach: heavy industry, long-distance transport, shipping, aviation, and high-temperature heat. The updated ambition of 10GW by 2030, up from the original 5GW target, signals a doubling of government commitment to the sector.

This political commitment translates directly into funding. The government has allocated over £1 billion specifically for hydrogen across DESNZ (Department for Energy Security and Net Zero), UKRI, and Innovate UK programmes. On top of that, hydrogen technologies are eligible for a range of broader clean energy and industrial decarbonisation funds that are not hydrogen-specific but where hydrogen projects compete strongly.

For climate tech SMEs and mid-stage companies developing hydrogen technologies, this landscape represents a significant opportunity but also a challenge. The number of overlapping programmes, differing eligibility criteria, and varying timelines can make it difficult to know where to focus. This guide breaks down each major funding source, explains who it is for, and provides practical advice on how to approach it.

The Net Zero Hydrogen Fund is the UK government's flagship hydrogen funding programme, administered by DESNZ. With up to £240 million in capital funding, the NZHF supports the commercial deployment of low-carbon hydrogen production projects across the UK. It is the single most important funding programme for companies building hydrogen production capacity at scale.

The NZHF operates across multiple strands, each targeting a different stage of project development:

Innovate UK, the UK's innovation agency and part of UKRI, runs several funding programmes that are directly relevant to hydrogen companies. Unlike the NZHF, which focuses on production deployment, Innovate UK programmes tend to support earlier-stage research, development, and demonstration across the entire hydrogen value chain: production, storage, distribution, and end-use applications.

The Aerospace Technology Institute (ATI) Programme is a joint government-industry initiative that provides grant funding for aerospace R&D in the UK. Hydrogen is now one of the ATI's highest-priority technology areas, reflecting the aviation industry's recognition that hydrogen, whether as a direct combustion fuel or as a feedstock for sustainable aviation fuel (SAF), is critical to meeting net zero aviation targets.

The ATI Programme has funded several landmark hydrogen-aviation projects, including liquid hydrogen fuel system development, hydrogen propulsion architectures, and hydrogen-powered aircraft subsystems. Projects range from fundamental research (TRL 2-3) through to full-scale demonstrators (TRL 6-7). Grant sizes vary considerably: smaller feasibility studies may receive £500,000 to £2 million, while major demonstrators and platform-level projects can attract £10 million to £50 million in public funding.

Eligibility for the ATI Programme requires that the technology has a clear application in civil aerospace. However, the definition is broad enough to include hydrogen production for SAF, cryogenic storage systems, fuel cells for auxiliary power units, and ground-side hydrogen infrastructure for airports. If your hydrogen technology has an aviation pathway, the ATI Programme should be a primary target. Applications require a strong industrial partner, typically a Tier 1 aerospace company or airframer, as part of the consortium.

Hydrogen plays a central role in the UK's industrial decarbonisation strategy. Several funding programmes target the intersection of hydrogen and heavy industry, including steelmaking, chemicals, cement, glass, and ceramics. These programmes recognise that many industrial processes require high-temperature heat that cannot be easily electrified, making hydrogen a critical decarbonisation pathway.

The Industrial Energy Transformation Fund (IETF), administered by DESNZ, provides capital grants to help energy-intensive businesses switch to low-carbon fuels, including hydrogen. Phase 3 of the IETF has allocated over £185 million in grant funding for industrial decarbonisation projects. Hydrogen fuel-switching projects are particularly well-suited to this programme, especially where they can demonstrate replicability across multiple industrial sites.

Hydrogen BECCS (Bioenergy with Carbon Capture and Storage) represents a specific funding opportunity at the intersection of hydrogen production and negative emissions. The concept involves producing hydrogen from biomass while capturing and storing the resulting CO2, delivering both clean hydrogen and negative emissions. DESNZ and UKRI have funded feasibility studies and pilot projects in this area, and further funding is expected as the UK refines its greenhouse gas removal strategy. For companies working on gasification, pyrolysis, or reforming technologies that can process biogenic feedstocks, Hydrogen BECCS represents a strategically valuable funding angle.

The Industrial Decarbonisation Challenge, part of UKRI's wider challenge portfolio, has funded large-scale hydrogen deployment projects in industrial clusters. These projects typically involve multiple industrial partners, hydrogen producers, infrastructure operators, and research organisations working together to demonstrate hydrogen at cluster scale. Individual partner grants within these large consortia can reach £5 million to £15 million.

The UK's hydrogen strategy has a strong regional dimension. The government has identified several industrial clusters as priority areas for hydrogen deployment, including Humber, Teesside, HyNet (North West), South Wales, Grangemouth (Scotland), and the Southampton-Solent corridor. Each of these regions has its own hydrogen ecosystem, funding mechanisms, and strategic priorities.

Regional hydrogen funding takes several forms. Devolved administrations, particularly the Scottish Government and the Welsh Government, operate their own hydrogen-specific funding programmes. The Scottish Government's Hydrogen Action Plan is backed by dedicated funding for hydrogen production, distribution, and end-use demonstration projects. Scottish Enterprise and Highlands and Islands Enterprise also offer R&D grants that hydrogen companies can access.

English regions benefit from the UK Shared Prosperity Fund, Town Deals, and Levelling Up Fund, all of which can support hydrogen infrastructure projects. Combined authorities and local enterprise partnerships (LEPs) in hydrogen cluster regions often provide additional match funding or letters of support that strengthen national-level bids. Being embedded in a recognised hydrogen cluster can significantly strengthen your application to the NZHF or Innovate UK calls, because assessors value projects that contribute to established cluster development plans and have clear routes to offtake.

For companies that are not already located in a hydrogen cluster, the strategic question is whether to partner with cluster-based organisations or to target non-cluster funding routes. Both approaches can work, but the cluster pathway offers advantages in terms of shared infrastructure, regulatory support, and a pre-existing ecosystem of potential customers and partners.

With the UK's association to Horizon Europe confirmed, UK hydrogen companies now have full access to the largest research and innovation funding programme in the world. Horizon Europe allocates approximately EUR 95.5 billion across 2021-2027, and hydrogen features prominently in Cluster 5 (Climate, Energy and Mobility) of Pillar II.

The Clean Hydrogen Joint Undertaking (Clean Hydrogen JU) is the most important Horizon Europe vehicle for hydrogen companies. It is a public-private partnership between the European Commission, Hydrogen Europe (the industry association), and Hydrogen Europe Research (the research association). The Clean Hydrogen JU publishes annual work programmes with specific call topics covering the entire hydrogen value chain, from advanced electrolysis and novel production methods through to hydrogen storage, transport, distribution, and applications in transport, industry, and the built environment.

Typical Clean Hydrogen JU grants range from EUR 2 million to EUR 5 million per partner within consortia of 5-15 organisations from at least three different countries. The funding rate for research and innovation actions (RIA) is 100% of eligible costs, while innovation actions (IA) are funded at 70% for commercial partners and 100% for research organisations. UK companies can lead these consortia, which is a significant advantage in shaping the project scope and direction.

Beyond the Clean Hydrogen JU, standard Horizon Europe calls under Cluster 5 regularly include topics relevant to hydrogen companies, such as integrated energy systems, sector coupling, and energy storage. The EIC Accelerator also funds breakthrough hydrogen technologies through its blended finance instrument (up to EUR 2.5 million grant plus up to EUR 15 million equity investment). Building a European consortium requires time and relationships. Our Consortium Leadership service helps UK hydrogen companies identify the right partners and structure competitive bids.

Winning hydrogen grant funding requires more than a strong technology. Assessors evaluate applications against specific criteria, and understanding what they prioritise is the difference between a funded project and a rejection. Based on our experience supporting hydrogen bids across every major UK programme, here are the factors that separate winning applications from the rest.

Hydrogen is one of GreenFundr's deepest sectors. Our founder and team have supported hydrogen bids across the full spectrum of UK and European programmes, from early-stage Innovate UK feasibility studies through to multi-million-pound NZHF production projects and Horizon Europe collaborative research.

Our track record includes work on projects such as LH-SIFT (Liquid Hydrogen for Sustainable Intermodal Freight Transport), a cross-sector initiative developing liquid hydrogen supply chains for heavy-duty transport applications. We have also supported Hydrogen Highways projects focused on building hydrogen refuelling infrastructure corridors and distribution networks. These projects require deep technical understanding of hydrogen systems, from electrolysis and liquefaction through to storage, distribution, and dispensing, combined with the grant-writing expertise needed to present complex technical programmes in the format that assessors expect.

What sets our hydrogen support apart is that we understand both the technology and the funding landscape. We know which programmes are coming, which have historically funded hydrogen projects, and what assessors in each programme prioritise. This means we can advise not just on how to write a strong bid, but on when to bid, which programme to target, and how to structure your consortium for maximum competitiveness.