Government is currently actively working on appropriate policy mechanisms to fund the hydrogen and CCUS infrastructure associated with HyNet and other low carbon cluster projects. It is likely that separate mechanisms will be used to fund the CCUS infrastructure, the hydrogen distribution network and the hydrogen production and use infrastructure.
Many companies in the hydrogen / CCUS sector, including Progressive Energy and Cadent, have been actively involved in working with Government to help develop a suitable policy framework. Through a group called the CCUS Advisory Group (CAG), business models for all aspects of the CCUS value chain have been developed. These formed the basis for a Government consultation on CCUS, which closed in October 2019, whilst a further consultation on funding mechanisms for hydrogen production (and use) will be launched in spring 2020.
It is expected that Government will make further announcements on policy in spring 2020. These will build upon a Conservative Party Manifesto pledge during the 2019 General Election to allocate £800M of capital funding to CCUS projects.