A coalition of UK hydrogen manufacturers has warned ministers that continued policy delays are eroding confidence among investors and company boards, risking the country’s domestic technology supply chain.
The warning comes as the industry continues to await an updated hydrogen strategy, a decision on the 27 projects shortlisted under the government’s second hydrogen subsidy round, and clarity on future funding schemes.
In a letter sent to finance, business, and energy ministers, seen exclusively by H2 View, nine hydrogen and fuel cell businesses said the delays were having significant implications for discussions with boards and investors.
“The impact of these delays is now critical,” the letter signed by companies including cylinder manufacturers Chesterfield Special Cylinders and Luxfer, ammonia cracking firm H-Power, and chemicals and technology player Johnson Matthey states.
The companies warned that some were considering whether investments planned for the UK should be “moved abroad” or “dropped completely.”
Collectively, the group said it could invest hundreds of millions and create thousands of manufacturing jobs before the 2029 general election, but warned prolonged uncertainty was undermining confidence in those plans. The letter did not quantify the investment and employment projections.
Ministers had an updated hydrogen strategy before the end of 2025. The government has also yet to confirm proceeding under the second hydrogen allocation round (HAR2), despite totalling 765MW in early 2025.
Final contract negotiations were originally expected to begin in late 2025 and early 2026. Without contracts, developers are unable to reach final investment decision.
However, the group said the issue extends beyond individual hydrogen production projects.
Chris Waters, CEO of Chesterfield Special Cylinders, told H2 View, “If these projects and these government policies are not released soon, we are undoubtedly risking losing that domestic supply chain through lack of investment and uncertainty.”
Although the government has been increasing its rhetoric around buying British-made products for subsidised projects in defence and steel, there are no existing policies to support UK-made hydrogen technologies in domestic hydrogen projects. The EU has recently proposed rules for electrolyser technologies deployed in publicly-funded projects.
The group had planned to hold a Parliamentary Showcase this week to highlight UK hydrogen and fuel cell technologies and discuss investment plans with policymakers, but postponed the event because of the continued delays.
The signatories said they had been engaging with the government, Great British Energy and MPs since September 2025 to highlight the role domestic hydrogen manufacturing could play in delivering economic growth and energy security.
Other companies behind the letter are fuel cell firm Intelligent Energy, methane pyrolysis player HiiRoc, US-based engine injector company Clean Air Power, and Toyota GB.
Trade bodies Hydrogen UK and the Hydrogen Energy Association also signed the letter.
A Department for Energy Security and Net Zero spokesperson told H2 View it planned to publish the new strategy “as soon as possible” and that it aimed to award HAR2 contracts in 2026. They did not comment on HAR3 consultations or whether it was committed to future funding rounds.
“We are already seeing the first wave of large-scale projects being delivered, and our renewed hydrogen strategy will set out how we intend to work together with industry to continue to transform ambition into action,” they said.
While ministers continue to describe low-carbon hydrogen as an important part of the UK’s industrial decarbonisation strategy, the government is also to contain public spending, accelerate economic growth and respond to concerns over energy affordability.
Industry participants are increasingly questioning how hydrogen fits within those competing priorities and whether the sector remains a near-term policy focus.
The Treasury did not respond to H2 View enquiries at the time of publication.
