The UK is set to fall drastically short of its hydrogen and carbon capture targets for 2030, according to global engineering consultancy DNV’s latest UK Energy Transition Outlook 2025.
The government has set ambitious goals of reaching 10 gigawatts (GW) of low-carbon hydrogen production capacity and capturing 20 million to 30 million tonnes of CO2 per year (MtCO2) by the end of the decade. However, DNV forecasts that the UK will achieve just 4 GW of hydrogen capacity and only five MtCO2 per year in carbon capture and storage (CCS), highlighting a major gap in delivery.
“Without significant additional government support and incentives, it is unlikely that low carbon hydrogen production rates will meet our 2030 targets,” the report states. DNV forecasts hydrogen production to reach only 0.9 MtH2 per year in 2030, of which “only 25% will be low carbon.” This is far below the UK government’s target of 10 GW.
The roll-out of CCS infrastructure is facing similar struggles. “We have assessed that the current planned/supported Track 1 CCS projects would result in 5 MtCO2 per year CCS capacity in 2030, significantly short of the UK target of 20 Mt to 30 Mt per year by that year,” the report warns. Despite recent final investment decisions (FIDs) on key projects, deployment remains far behind expectations.
The findings highlight a critical risk to the UK’s Net Zero strategy, as industries relying on hydrogen and CCS for decarbonisation – such as heavy industry, power generation, and transport – could face continued dependence on fossil fuels.
“The development of the UK hydrogen market needs significant support,” the report states. “Without a clear business model or market support mechanism, high production costs would make hydrogen generally uncompetitive for industrial use and domestic heating even by 2050.”
Government funding and projects
While the DNV report highlights serious concerns over the UK’s progress on hydrogen and CCS, the government has announced a wave of funding and policy support aimed at accelerating deployment. New investments and major projects could help address some of the key bottlenecks, but questions remain over whether they will be remotely enough to meet 2030 and 2050 targets.
In October 2024, the UK government announced up to £21.7bn ($26.9bn) over 25 years to support the nation’s first carbon capture and storage (CCS) projects. These initiatives are concentrated in Teesside and Merseyside, with the capacity to store over 8.5 MtCO2 annually.
And in January 2025 the UK government allocated £51.9m ($64.4m) to 25 businesses for emissions-reducing projects as part of its Plan for Change, targeting economic growth and Net Zero emissions by 2050.
