Northern Ireland advances hydrogen policy

Richard Murphy and Matthew McMurray, energy law experts at Pinsent Masons, were commenting after Northern Ireland’s Department for the Economy (DfE) published the results of its consultation exercise (43 pages / 426KB PDF) on developing the local hydrogen industry.

The DfE committed to carrying out a consultation on hydrogen policy by the end of 2025 as part of its 2025 Energy Strategy Action Plan. The consultation, which ran between 25 September and 18 December 2025, sought views on how to develop a sustainable, regional approach for the production, storage, transport, and use of hydrogen across Northern Ireland. The responses are expected to feed into the development of a designated action plan for Northern Ireland’s nascent hydrogen industry.

The report, published on 27 May, said the standard of hydrogen being produced in Northern Ireland should be guaranteed by ensuring “parity with the rest of the UK” and thereby aligning with the UK-wide Low Carbon Hydrogen Standard (LCHS), which defines the emissions threshold that hydrogen must meet to be formally recognised as “low carbon” and to qualify for government support.

However, the report also highlights the need for greater clarity and support in navigating UK-wide funding mechanisms, as well as the need for "strong policy signals" to secure investment and incentivise industry commitment to hydrogen locally.

From a regulatory perspective, the DfE said the consultation responses confirmed its preferred position to expand the Utility Regulator’s existing mandate from electricity, gas and water to include hydrogen. Following the development of a finalised hydrogen policy and action plan for the local hydrogen sector, industry stakeholders have voiced a need for a clear and comprehensive regulatory framework that spans the entire hydrogen value chain – from production through to transport, storage, blending and end-use.

The report concluded that setting potential hydrogen targets did not currently appear to be in the sector’s best interests given growing evidence that other more developed jurisdictions have struggled to meet overly ambitious targets. The DfE said for the time being it would review progress in hydrogen deployment in line with “actual need, rather than set arbitrary targets.”

In terms of exploring options to expand the industry, the report pinpointed e-fuels and sustainable air fuels as an emerging area for the local industry. The consultation highlighted growing recognition of an emerging demand for hydrogen-to-power expertise in Northern Ireland, but the DfE warned it would be “premature” to establish a mandated approach given ongoing uncertainties linked to adaptation costs, security of supply and strategic planning.

The report also noted that the UK’s Department for Energy Security and Net Zero (DESNZ) carried out a separate consultation on hydrogen blending into Great Britain’s transmission network in late 2025, with next steps expected to be published shortly. In the meantime, the DfE said it would continue to work with local stakeholders to come to a decision on Northern Ireland’s approach to hydrogen blending in existing gas networks.

Murphy, an energy sector expert with Pinsent Masons in Belfast, said the consultation was an important early milestone that will help inform hydrogen policy, but there was still a lot to be done to allow Northern Ireland’s hydrogen industry to scale meaningfully. “The Department’s response represents a positive step forward in setting a clearer direction for hydrogen in Northern Ireland, particularly in identifying a preference for alignment with UK and Irish standards, prioritisation of green hydrogen, and expansion of the Utility Regulator’s remit to include hydrogen,” he said. “However, it also highlights that the sector remains at an early stage, with significant work still required to unlock its full potential.”

The report also comes as a recent survey conducted by Pinsent Masons and Censuswide identified low carbon hydrogen technologies as the most popular low carbon energy projects for global investors and developers to back in the next 12 months. Hydrogen is increasingly being identified as a critical component for a low carbon economy as governments and businesses race to achieve net zero targets.

McMurray, also an energy sector expert with Pinsent Masons in Belfast, said the report clarified the steps Northern Ireland now needs to take to attract capital and interest into this nascent industry. “The development of a clear, coherent legal and regulatory framework will be critical, alongside viable routes to market and access to funding mechanisms,” he said. “Without these foundations, investment and project development are likely to remain constrained. While policy momentum is building, realising commercial value in the hydrogen market at this nascent stage will require proactive and informed engagement to ensure strategies are closely aligned with an evolving and increasingly complex policy landscape.”