Officials have not said how much they think the subsidy scheme might cost. The Treasury is yet to publish a long-awaited review on the price tag for reaching climate goals amid concern over the impact on bills.
The plans, which remain subject to consultation, are part of a strategy Government is publishing on Tuesday on the future of hydrogen in the national energy mix. The gas does not produce carbon dioxide when burned.
The Government’s strategy published today says that hydrogen could meet 20-35pc of the UK’s energy demand by 2050, compared to a tiny negligible amount currently, and it wants the UK to be producing 5GW by 2030.
Officials claim this could create more than 9,000 UK jobs and unlock £4bn investment by 2030, potentially rising to 100,000 jobs by 2050.
Government says that about 45TWh of UK buildings’ heating might be supplied by hydrogen in 2035. Currently, about 434TWh of energy is used each year to heat UK homes.
Major energy companies such as BP, Shell and Scottish Power are all planning investment in hydrogen, and projects could get the go-ahead under the right investment conditions.