Funding competition Net Zero Hydrogen Fund – Strand 2 – Capital expenditure (CAPEX)

Strand 2 of the Net Zero Hydrogen Fund will provide capital expenditure (CAPEX) support for new low carbon hydrogen production facilities to begin deployment in the early 2020s.

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Competition sections

Description

The aim of the Net Zero Hydrogen Fund (NZHF) is to provide capital expenditure (CAPEX) and development expenditure (DEVEX). This will support the commercial deployment of new low carbon hydrogen production projects during the 2020s.

This is to ensure the UK has a diverse and secure decarbonised energy system fit for meeting our ambition of up to 10GW low carbon hydrogen production by 2030, and commitment to reach net zero by 2050.

The NZHF will deliver up to £240m via four strands as follows:

Strand 1 : Development Expenditure (DEVEX) support for front end engineering design (FEED) studies and post-FEED studies, to grow the future pipeline of hydrogen projects in the UK.

Strand 2: Capital Expenditure (CAPEX) for projects that do not require a hydrogen specific business model. These are low carbon hydrogen projects that can deploy on the basis of capital expenditure support and are able to start construction rapidly.(This strand)

Strand 3: CAPEX for projects that require a hydrogen business model (HBM) and sit outside of the Phase 2 cluster sequencing process.

Strand 4: CAPEX for carbon capture usage and storage (CCUS) enabled projects that require a hydrogen specific business model and are part of the Phase 2 cluster sequencing process.

This competition relates to Strand 2 only.

Strand 1 is being delivered through a separate competition. Strands 3 and 4 will be delivered by BEIS. Projects which require support from a Hydrogen Business Model must apply to either Strand 3 or Strand 4, and not to Strand 2.

We recognise that some projects may be considering revenue support through both the Hydrogen Business Model and the Department for Transport’s Renewable Transport Fuel Obligation (RTFO) scheme. Subject to compliance with subsidy control principles, it is our intention to develop arrangements that could support dual participation in both schemes – although we would not look to allow projects to claim both sources of funding for the same volumes of hydrogen. We would envisage these projects applying for support through strand 3 (the joint NZHF-HBM allocation round), but further detail will be provided on this before the close of the strand 2 application window to allow projects to consider before finalising their arrangements. Applicants will need to satisfy themselves that they have applied to the appropriate strand for the requirements of their project.

Your proposal for strand 2 must demonstrate how you will develop a credible project that will contribute to the at-scale production of low carbon hydrogen by 2025. Funded projects must support the delivery towards the 10GW production target by 2030 set out in the Energy Security Strategy UK Hydrogen Strategy.

Hydrogen production projects will be able to apply for co-funding through Strand 2 if they require CAPEX support to take a Final Investment Decision (FID) and begin deployment in the early 2020s.

It is the responsibility of the applicant to ensure that they are entering the appropriate challenge competition for their project.

You will not be able to transfer your application and it will not be sent for assessment if it is out of scope.

In applying to this competition, you are entering into a competitive process. This competition closes at 11am UK time on the deadline stated.

We reserve the right to cancel, amend or vary the competition processes, including any envisaged stage and any document issued pursuant to it, at any point and for any reason.

Funding type

Grant

Project size

Your total grant request must be between £200,000 and £30 million.

Who can apply

Your project

Your project must:

  • have a total grant request of between £200,000 and £30 million
  • start by 1 January 2023
  • end by 31 March 2025
  • last between 6 and 27 months
  • carry out all of its project work in the UK
  • intend to exploit the results from or in the UK
  • meet the Draft Low Carbon Hydrogen Standard
  • be using core technology that has been tested in a commercial environment, Technology Readiness Level (TRL) 7 or more

If your project’s total grant request, duration or CAPEX support falls outside our eligibility criteria, you must provide justification by email to support@iuk.ukri.org at least 20 working days before the competition closes. We will decide whether to approve your request.

If you have not requested approval or your application has not been approved by us, you will be made ineligible and your application will not be sent for assessment.

Lead organisation

To lead a project or work alone your organisation must be a UK registered business of any size

Academic institutions, research and technology organisations (RTOs), public sector organisations or charities cannot lead or work alone.


Project team

To collaborate with the lead, your organisation must be one of the following UK registered:

Each partner organisation must be invited into the Innovation Funding Service by the lead to collaborate on a project. Once accepted, partners will be asked to login or to create an account and enter their own project costs into the Innovation Funding Service.

Your project can include partners that do not receive any of this competition’s funding, for example non-UK businesses. Their costs will count towards the total eligible project costs.

Subcontractors

Subcontractors are allowed in this competition.

Subcontractors can be from anywhere in the UK or overseas.

All subcontractor costs must be justified and appropriate to the total project costs.

Number of applications

A business can lead on up to 2 applications, which must be materially different, and can be included as a collaborator in a further 2 applications.

An academic institution or a research and technology organisation (RTO), charity, not for profit or public sector organisation can collaborate on any number of applications.

Previous applications

You cannot use a previously submitted application to apply for this competition.

We will not award you funding if you have:

Subsidy control (and State aid where applicable)

This competition provides funding in line with the UK's obligations and commitments to Subsidy Control. Further information about the UK Subsidy Control requirements can be found within the EU-UK Trade and Cooperation agreement and the subsequent guidance from the department of Business, Energy and Industrial Strategy (BEIS).

BEIS and Innovate UK are unable to award funding to organisations that are considered to be in financial difficulty. We will conduct financial viability and eligibility tests to confirm this is not the case following the application stage.

EU State aid rules now only apply in limited circumstances. Please see our general guidance to check if these rules apply to your organisation.

Further Information

If you are unsure about your obligations under the UK Subsidy Control regime or the State aid rules, you should take independent legal advice. We are unable to advise on individual eligibility or legal obligations.

You must make sure at all times that the funding awarded to you is compliant with all current Subsidy Control legislation applicable in the United Kingdom.
This aims to regulate any advantage granted by a public sector body which threatens to or actually distorts competition in the United Kingdom or any other country or countries.

If there are any changes to the above requirements that mean we need to change the terms of this competition, we will tell you as soon as possible.

Funding

Up to £90 million has been allocated to fund projects across strands 1 and 2 for this competition. The breakdown between Strands 1 and 2 is not fixed, but the NZHF is primarily a deployment fund and this may influence your expectations on funding for Strand 2.

If the majority of your organisation’s work on your project is commercial or economic, your funding request must not exceed the limits below. These limits apply even if your organisation normally acts non-economically.

For capital expenditure (CAPEX) support, you could get funding for your eligible project costs of up to 30% if you are a UK registered business of any size.

For more information on company sizes, please refer to the company accounts guidance. This is a change from the EU definition unless you are applying under State aid.

If you are applying for an award funded under State aid Regulations, the definitions are set out in the European Commission Recommendation of 6 May 2003.

Research participation

The research organisations undertaking non-economic activity as part of your project can share up to 30% of the total eligible project costs. If your consortium contains more than one research organisation undertaking non-economic activity, this maximum is shared between them.

Of that 30% you could get funding for your eligible project costs of up to:

  • 80% of full economic costs (FEC) if you are a Je-S registered institution such as an academic
  • 100% of your project costs if you are an RTO, charity, not for profit organisation, public sector organisation or research organisation

Your proposal

This competition will provide capital expenditure (CAPEX) to support low carbon projects to take a Final Investment Decision (FID) and begin deployment in the early 2020s. Your project must not require support from a hydrogen business model (these projects are covered in Strands 3 and 4 of the NZHF). This competition supports multiple hydrogen production pathways.

Your project must address low carbon hydrogen production opportunities and must focus on construction of new low carbon hydrogen production facilities.

We expect credible projects to utilise one of the following hydrogen production types:

  • electrolysis
  • methane reforming
  • gasification

We want to fund a portfolio of projects, across this competition, based on:

  • geographical location
  • project scale and replicability
  • project cost and funding available
  • project timescales
  • hydrogen production technology type
  • hydrogen production commercial readiness
  • alignment with and contribution to wider cross-economy decarbonisation
  • environmental impacts
  • use of additional low carbon electricity
  • affordability considerations, for example, longer term cost to the taxpayer
  • projects awarded funding through related BEIS and UKRI competitions
  • offtaker type

This will support the twin-track approach to hydrogen production as outlined in the UK Hydrogen Strategy.

Research categories

We will fund capital projects which do not require support from a Hydrogen Business Model.

Projects we will not fund

We will not fund projects that:

  • do not focus on low carbon hydrogen production at scale and the immediate supply chains
  • require a hydrogen business model (HBM)
  • are not building new low carbon hydrogen production facilities
  • have total grant requests or timescales outside the specified range
  • rely on gas blending into the gas network as a sole offtaker.
  • are not able to take a Final Investment Decision (FID) within 3 months of receipt of a conditional grant offer letter
  • are dependent on export performance, for example giving a subsidy to a baker on the condition that it exports a certain quantity of bread to another country
  • are dependent on domestic inputs usage, for example giving a subsidy to a baker on the condition that it uses 50% UK flour in their product

25 April 2022
Competition opens
26 April 2022
Online briefing event: watch the recording
6 July 2022 11:00am
Competition closes
19 August 2022
Invite to interview
12 September 2022
Interview panel
30 September 2022
Applicants notified

Before you start

You must read the guidance on applying for a competition on the Innovation Funding Service before you start.

What we ask you

The application is split into 3 sections:

1. Project details.

2. Application questions.

3. Finances.

Interviews

If your online application is assessed as eligible, you may be invited to attend an interview, where you must give a presentation. Your interview will take place either online or at a designated location, the date and time of your interview will be included in your invitation.

Before the interview and by the deadlines stated in the invitation email, you:

  • must provide the additional financial information within 5 working days, if your grant request is more than £5million
  • must send a list of up to 5 people who will attend the interview, ideally one person from each organisation
  • must send your interview presentation, with no more than 20 slides
  • can send a written response to the assessors’ feedback of up to 3 A4 pages

List of attendees

Agree the list with your consortium. Up to 5 people from your project can attend, ideally one person from each organisation. They must all be available on all published interview dates. We are unable to reschedule slots once allocated.

Presentation slides

Your interview presentation must:

  • use Microsoft PowerPoint
  • be no longer than 30 minutes
  • have no more than 20 slides
  • not include any video or embedded web links

You cannot change the presentation after you submit it or bring any additional materials to the interview.

Written response to assessor feedback

This is optional and is an opportunity to answer the assessors’ concerns. It can:

  • be up to 3 A4 pages in a single PDF or Word document
  • include charts or diagrams

Additional Financial Information

You and your business partners will need to provide additional financial information within 5 working days of receiving your invite to interview.

All partners in the consortium must provide:

  • your signed and audited accounts for the previous two financial years
  • your parent group’s signed accounts for the previous two financial years if applicable
  • company forecast accounts covering the remainder of this financial year and a further four financial years
  • financial forecasting for the project, including calculated return on investment and financial viability of the project

All documents must be provided in PDF format.

Interview

After your presentation the panel will spend 90 minutes asking questions. You will be expected to answer based on the information you provided in your application form, presentation and the response to feedback.

After your interview

The interview panel will prepare a list of projects recommended for funding, based on the new knowledge gained from the interviews. They will also take into account the portfolio design criteria for the competition.

This list will be reviewed by an Innovate UK led funding panel and approved for submission to BEIS ministers for a final decision.

If recommended, you will receive an initial conditional offer letter from Innovate UK. Your final award is subject to you receiving BEIS ministerial approval and successfully completing project set up, including financial and due diligence checks.

Innovate UK will advise you of the ministerial decision from BEIS.

It is possible that an application that received lower assessors’ scores may be recommended for funding over others, in order to achieve a balanced portfolio of projects.

1. Project details

This section provides background for the assessors and is not scored.

Application team

Decide which organisations will work with you on the project. Invite people from those organisations to help complete the application.

Application details

The lead applicant must complete this section. Give your project’s title, start date and duration.

Subsidy basis

Will the project, including any related activities you want Innovate UK to fund, affect trade between Northern Ireland and the EU?

You and all your project partners must respond and mark this question as complete, before you can submit your application.

Research category

Select the type of research you will undertake.

Equality, diversity and inclusion

We collect and report on equality, diversity and inclusion (EDI) data to address under-representation in business innovation and ensure equality, diversity and inclusion across all our activities.

All participants must complete this EDI survey and the lead applicant must then select yes in the application question. The survey will ask you questions on your gender, age, ethnicity and disability status. You will always have the option to ‘prefer not to say’ if you do not feel comfortable sharing this information.

Project summary

Describe your project briefly and be clear about what makes it innovative. We use this section to assign the right experts to assess your application.

Your answer can be up to 400 words long.

Public description

Describe your project in detail and in a way that you are happy to see published. Do not include any commercially sensitive information. If we award your project funding, we will publish this description. This could happen before you start your project.

Your answer can be up to 400 words long.

2. Application questions

The assessors will score all your answers to question 6 to 12. Questions 1 to 5 are not scored but will be reviewed for eligibility. You will receive feedback for each scored question. Find out more about how our assessors assess.

You must answer all questions. Do not include any website addresses (URLs) in your answers.

Question 1. Applicant location (not scored)

You must state the name and full registered address of your organisation and any partners working on your project. We are collecting this information to understand the geographical location of all applicants.

Your answer can be up to 400 words long.

Question 2: Scope (not scored)

Describe how your project fits the scope of the competition.

If your project is not in scope it will be immediately rejected and will not be sent for assessment. We will give you feedback on why.

Describe:

  • the type of production your project will focus on, that is electrolytic hydrogen, carbon capture usage and storage (CCUS) enabled, or an alternative approach
  • how you will generate low carbon hydrogen as defined by the Draft Low Carbon Hydrogen Standard
  • confirm that the production technology being proposed has been demonstrated in a commercial environment to a minimum of TRL7
  • engagement with primary offtakers, including a summary of the agreements which have been reached
  • the use and necessity of hydrogen by the potential offtakers connected to your project for example power, heat, raw material, storage and transport
  • if relevant to your project, engagement with the Department for Transport (DfT) to confirm that Renewable Transport Fuel Obligation (RTFO) support has been secured

Your answer can be up to 800 words long.

You must upload 2 appendices to support your answer.

Appendix A must show that the core technology being proposed has been demonstrated in a commercial environment to a minimum of TRL7. It must be a PDF, up to 2 A4 pages long and no larger than 10MB in size. The font must be legible at 100% zoom.

Appendix B must provide evidence of agreement with one or more offtakers. It must be a PDF, up to 4 A4 pages long and no larger than 10MB in size. The font must be legible at 100% zoom.

If your project relies on RTFO support from DfT, you must upload an additional appendix (Appendix C) which confirms that an agreement is in place. It must be a PDF, up to 4 A4 pages long and no larger than 10MB in size. The font must be legible at 100% zoom.

Question 3. Project Finance (not scored)

You must confirm that you have the required private sector finance in place to support your proposed project.

If you are relying on external investment, you must describe your financing plan and the status of discussion with potential financiers.

If your response is considered as ineligible not suitable, your proposal will be rejected and will not be sent for assessment. We will tell you the reason why.

Your answer can be up to 400 words long.

Question 4. Compliance with the Draft Low Carbon Hydrogen Standard (not scored)

Explain how your hydrogen production proposal will meet the requirements of the Draft Low Carbon Hydrogen Standard.

On completion of the hydrogen emissions calculator (HEC), the calculator will confirm based on the data submitted whether your project is likely to be compliant with the draft low carbon hydrogen standard.

You must upload two appendices to support your answer.

Appendix A must be a completed copy of the calculator demonstrating that the project can meet the Draft Low Carbon Hydrogen Standard guidance including the emissions threshold of 20gCO2e/MJLHV H2 (leeway of +0.5 gCO2e/MJLHV H2). It must be an Excel workbook and no larger than 10Mb in size. The font must be legible at 100% zoom.

Appendix B must be a plan demonstrating how your hydrogen production plant will be designed and operated to ensure that fugitive hydrogen emissions are kept as low as reasonably practical. It must be a pdf, up to 2 A4 pages long and no larger than 10MB in size. The font must be legible at 100% zoom.

If your response is considered as ineligible, your proposal will be rejected and will not be sent for assessment. We will tell you the reason why.

Your answer can be up to 600 words long

Question 5. Finances (not scored)

How much will your project cost?

You must provide estimates of:

  • your project’s total costs
  • the grant funding you are requesting
  • any subcontractor costs and why they are critical to your project
  • any partner’s costs and how they will finance their contributions to the project

If your response is considered as ineligible, your proposal will be rejected and will not be sent for assessment. We will tell you the reason why.

Your answer can be up to 400 words long.

You can upload an appendix to support your answer. It must be a PDF, up to 2 A4 pages long and no larger than 10MB in size. The font must be legible at 100% zoom.

Question 6. Project delivery

What activities, approaches and methods will you be delivering and how will this be achieved?

This question is worth 25% of the score.

Describe:

  • your project’s industrial partners and confirmed offtakers
  • your assessment of potential offtakers including your engagement with these parties
  • your project’s engagement with commercially and technically viable energy sources, including the use of additional low carbon electricity
  • the resources, skills, and capabilities that will be needed to deliver your project, and how you will address any gaps within your project team
  • the key activities which will take place over the course of your project, including key milestones (decision points, approvals)
  • any key performance indicators (KPIs) appropriate to your project
  • any areas that cannot be progressed within the timeframe or budget available
  • how you intend to take a final investment decision (FID) and an indication of the timeframe for this
  • how you will demonstrate that your project partners can deliver your project to the proposed timeframe
  • any procurement activities that might be needed, and your approach to procurement
  • how you will promote equality, diversity and inclusion within your project and demonstrate how your project team reflects your approach

Your answer can be up to 800 words long.

You must submit two appendices to support your answer.

Appendix A can include a short summary of the main people working on your project. It must be a PDF, up to 2 A4 pages long and no larger than 10MB in size. The font must be legible at 100% zoom.

Appendix B must be a project plan. Your project plan must be based on a start date of 1 January 2023 and include the expected finish date (up to March 2025). It must be a PDF, up to 2 A4 pages long and no larger than 10MB in size. The font must be legible at 100% zoom.

Question 7. Risks

What are the key risks and opportunities for your project?

This question is worth 10% of the score.

Explain:

  • the risks you have identified in developing and implementing in your project, including technical, legal, commercial, policy, supply chain, evidence and data gathering, and sourcing information, using a RAG (red, amber, green) rating for each risk
  • how you expect the level of risks to change over the lifetime of your project
  • any assumptions that you have made, and your approach to identifying any that may be made during your project
  • any mitigations that can be put in place to reduce the risk
  • any opportunities that could arise
  • how your project will manage uncertainty

Your answer can be 800 words long.

You can submit one appendix to support your answer. It can include diagrams and charts. It must be a PDF and can be up to 2 A4 pages long. The font must be legible at 100% zoom.

Question 8. Project governance and stakeholder management

What governance arrangements will you need to deliver this project successfully?

How will you manage all stakeholders effectively, including hydrogen offtakers?

This question is worth 10% of the score.

Describe:

  • the relationship between project partners and where each partner adds value to your project
  • the governance structure you will put in place including how you intend to manage the resolution of issues
  • how you will ensure that any subcontractors deliver to the required quality and timeframes
  • the reporting mechanisms you will implement for internal and external use
  • the wider engagement that needs to occur with other stakeholders external to core partner applicants, and how this will be managed
  • the proposed level of support from core suppliers, including demonstrating substantial engagement with prospective technology licensors
  • how future additional offtaker opportunities will be managed to enable wider access to hydrogen through project expansion opportunities
  • the approach which you will take to new commercial arrangements that may result from the deployment of low carbon hydrogen production from the site

Your answer can be up to 800 words long.

Question 9. Project significance and economic benefits

How will this investment contribute to a long term hydrogen economy?

This question is worth 20% of the score.

Describe both:

Project significance

  • your project’s success criteria and how these will be measured
  • the extent to which your project delivers carbon savings to the economy and contributes to the UK government’s 2030 hydrogen ambitions
  • the regional and national significance of the project including how your project will address the wider future demand for hydrogen in the region
  • whether there is opportunity to expand the production site in the future, based on increased regional and national demands

Economic benefits

  • the anticipated longer term economic benefits, including employment, supply chain development and attractiveness for new investment, including an estimate of the timescales for achieving these
  • how sustainable business practices will be adopted, including skills development, and how gaps in national and international supply chains will be identified and mitigated
  • the expected number of direct jobs in the construction and operation of your project and any indirect supply chain jobs that your project will support, explain how these numbers were identified
  • the types of job roles, salary ranges and expected numbers

Your answer can be up to 800 words long.

Question 10. Knowledge sharing and hydrogen market development

How will this project enhance the UK’s position as a world leader in Hydrogen production technology through shared-learning, dissemination and knowledge-exchange?

This question is worth 15% of the score.

Describe:

  • what processes you will adopt for ensuring that lessons are learned by the broad community of stakeholders which need to be involved in hydrogen production
  • how you will ensure that your project takes account of other relevant work, for example successful and unsuccessful international hydrogen production projects, previous government-funded or EU-funded work in the UK, and academic studies
  • what knowledge sharing arrangements you will put in place and how you will ensure that information is disseminated effectively, including considerations such as timeliness and means of communication
  • what evidence and data will be collected, including how and when this will be done and who will be responsible
  • the types of information you plan to share with other stakeholders which you have identified
  • how your project offers learning and development in relevant production technologies and enables research and innovation across the wider hydrogen value chain
  • how your project contributes to achieving the objectives set out in the Hydrogen Strategy Roadmap and to developing the required hydrogen market infrastructure (including production, use and network infrastructure)
  • the scalability and replicability of your project, and how you will build on experience to support future market development and cost reduction

Your answer can be up to 800 words long.

Question 11. Commercial

How do the costs of your project support delivery of value for money?

This question is worth 10% of the score.

Describe:

  • the extent to which your project would proceed without NZHF funding, including the likelihood of not proceeding, being scaled back or delayed, with reasons to support your answer
  • why are you not able to fully fund this project from your own resources or other forms of private sector funding, for example loans
  • how you will be match funding this project and what investments can be committed to this project and explain what the investments are, when they will occur, and the value attributed to them
  • how you will ensure the project will achieve commercial viability, including the timeline for this to occur, the assumptions which you have made and how you are assuring that the project costs are robust
  • what assumptions you are making about support from the DfT RTFO to move your project to commercial operation

Your answer can be up to 800 words long.

Question 12. Emissions and wider environmental impacts

How will your project support the government’s commitment to emissions reduction?

This question is worth 10% of the score.

The Hydrogen Emissions Calculator (HEC) which you completed in Question 4 can be used as evidence to support your answer to this question.

Describe:

  • the green house gas (GHG) intensity of your hydrogen production, which must be 20gCO2e/MJ LHV of produced hydrogen or less, include the key aspects of your process which have influenced the GHG intensity
  • how you are minimising environmental risks at an early stage, including impacts on land, air and water
  • how your project will be fit for the future, including resilience to the impacts of climate change

Your answer can be up to 800 words long.

3. Finances

Each organisation in your project must complete their own project costs, organisation details and funding details in the application. Academic institutions must complete and upload a Je-S form.

For full details on what costs you can claim see our project costs guidance.

Background and further information

Surveys

We will send you a short survey to ask how you found the application process. This survey will be sent at the end of the application window.

The information collected through this survey will be used for the monitoring and evaluation of the Net Zero Hydrogen Fund (NZHF) and to inform the design of subsequent phases of the scheme.

You are not required to complete this survey. The progress of your application is in no way dependent on completing the survey and your responses will not affect your application in any way.

If you progress to the interview stage, you may be invited to complete a second survey.

Financing low carbon hydrogen

In the last year, multiple funds and partnerships have been established in the UK and EU to accelerate the growth of the hydrogen sector.

Here is a brief description of some of the funds and partnerships involved:

  • Breakthrough Energy Catalyst is a partnership of companies, philanthropists and governments that provides low-cost equity, grants and product purchase commitments to low carbon infrastructure projects. Catalyst and the UK government announced a partnership to support commercial-scale projects in four sectors including clean hydrogen in October 2021.
  • HydrogenOne Capital Growth Plc is a publicly listed fund specialising in clean hydrogen, democratising private equity for public shareholders. It was launched in 2021 through an initial public offering (IPO) on the London Stock Exchange (LSE) with mandate to invest for growth across the Organisation for Economic Cooperation and Development (OECD)
  • HyCap is a private equity fund that invests across the UK hydrogen value chain. It is backed by a number of large industrial groups including JCB, Ballard, Northern Gas Network, Vedra Partners and Andrew Forest
  • Hy24 is a clean hydrogen infrastructure investment platform. It was created by Ardian and FiveT Hydrogen to accelerate hydrogen’s potential for industrial and mobility uses via impact investments

Draft Low Carbon Hydrogen Standard

As per the World Trade Organisation (WTO) Code of Good Practice for the Preparation, Adoption and Application of Standards, BEIS has published the Low Carbon Hydrogen Standard (LCHS) in draft. This is without prejudice as to whether this is a standard for the purpose of the Code. This will allow a period of 60 days for the submission of comments on the draft standard by interested parties within the territory of a WTO Member.

Should there be no material comments after 60 days, BEIS will take this draft as being finalised. BEIS will advise all applicants and interested stakeholders if any representations from WTO members result in changes to the LCHS before the end of the application window.

Additional Information to be submitted if invited to interview

1.Compliance with the Draft Low Carbon Hydrogen Standard

Please provide the evidence listed below if relevant to your type of project. In each case, the evidence should be submitted as a single pdf, up to 10Mb in size. The font must be legible at 100% zoom. In each case, the evidence must be preceded by a summary of the key elements of the content supplied. The summary should not exceed 2 A4 pages in length CCUS project eligibility:

To confirm eligibility, please provide the following documentation:

  • A proof of intent of an arrangement between your project and a CO2 transport and storage network
  • A proof of intent of the means by which you intend to transport the CO2 to the CO2 T&S network, if the CO2 cannot be injected via a pipeline
  • A proof that you are taking necessary steps to ensure a connection to the grid, if you plan to be connected to the UK gas network

Biomass or Waste project eligibility:

If you intend to use biogenic feedstocks, please:

  • confirm that at least 50% of the hydrogen you produce by energy content will be made using biogenic feedstocks classified as wastes or residues. See Annex C of LCHS guidance document for further detail. This could be evidenced by letters of intent or contracts from feedstock suppliers with specific reference to the percentage mix of waste being procured
  • provide evidence of your compliance with the biomass sustainability criteria (as per Annex D of the LCHS guidance document) including where applicable:
  • land criteria – specify voluntary scheme or third party assessment to be used
  • forest criteria - specify voluntary scheme or third party assessment to be used
  • soil carbon criteria - specify voluntary scheme or third party assessment to be used
  • provide evidence, where using biomethane as a feedstock, that you will not be using the natural gas system to transport this to the plant and it would not be mixed with fossil methane. See Annex E of the LCHS for further details

If you intend to use fossil waste feedstocks, please:

  • Confirm that you plan to use CCUS to meet the LCHS emission threshold and that you are not planning on using a counterfactual approach to evidence compliance
  • Provide evidence of the waste feedstock being procured (such as a letter of intent from a waste supplier) and how this meets the requirements of the waste hierarchy as per Regulation 12 of the Waste (England and Wales) Regulations 2011

2. Emissions Calculation and Supporting Evidence

Please provide the evidence listed below where relevant to your type of project. In each case, the evidence should be submitted as a single pdf, up to 10Mb in size. The font must be legible at 100% zoom. In each case, the evidence must be preceded by a summary of the key elements of the content supplied. The summary should not exceed 2 A4 pages in length The Hydrogen Emissions Calculator (HEC) completed as part of Question 4 can be used as evidence for this question.

Please provide:

  • A GHG emissions intensity of 20g CO2e/MJ LHV of produced hydrogen or less (this can be taken from the result of a completed HEC)
  • The necessary supporting evidence for this calculation as outlined below
Electrolytic projects:
  • Proof of intent or a procurement plan for low carbon electricity input that outlines how the threshold for the low carbon hydrogen standard will be met e.g. Power Purchase Agreements (PPAs) in place for planned for volumes of low carbon generation
  • Evidence the project does or will have the appropriate skills, expertise and metering in place to meet the technical requirements for low carbon electricity input
  • Where additionality is being claimed, proof of intent or a procurement plan that demonstrate the principles have been met for the proportion of electricity being claimed as additional
This could be the following:
  • contractual evidence that hydrogen production has been a decisive factor in life extension or recommissioning of a decommissioned site (e.g. business plan, PPA)
  • a contract with a new unsubsidised generator
  • evidence of a long term plan to utilise electricity through emergency instruction from the National Grid ESO, relevant Distribution Network Operator or through contractual evidence in the balancing mechanism or ancillary services
CCUS project assessment:
  • Please provide evidence to support the emissions of your input gas in the LCHS calculator. We expect to see contracts or letters of intent with suppliers and contracts or letters of intent for transportation if relevant. If you cannot provide this evidence note that we will assume you are using natural gas from the gas grid. This may impact your score in this section and others
  • Producers planning to use another fossil feedstock should provide a proof of intent from the suppliers they intend to get their natural gas or other fossil feedstock from or the gas grid average of the country they are planning to get their feedstock from (coming from an official source of this country)
  • A proof of intent of an arrangement with a CO2 transport and storage network. The letter should provide the compression requirements and estimated fugitive emissions from the network
If you intend to use biogenic feedstocks:
  • provide details of your emissions related to indirect land-use change as per Annex C of the LCHS guidance document

3. Calculation of CO2e levelised cost of hydrogen

An excel spreadsheet will be supplied to support the calculation. You will be required to complete the calculation and submit the response in the form of an excel spreadsheet, up to 10Mb in size. The font must be legible at 100% zoom. This should be accompanied by a summary of the key elements of the content supplied. The summary should not exceed 1 A4 page in length.

BEIS Definitions of Technology Readiness Level (TRL)

We are proposing that core production technology projects must be at TRL 7 or more to be eligible to apply to this competition. This ensures our funding supports projects where innovation funding ends.

For the purpose of this document, we are defining TRL 7 as ‘Integrated Pilot System Demonstrated: A prototype near or at planned operational system, requiring demonstration of an actual system prototype in an operational environment’.

Here are the BEIS definitions of Technology Readiness Levels 1 to 9:

TRL 1 – Basic Research

Scientific research begins to be translated into applied research and development.

TRL 2 – Applied Research

Basic physical principles are observed, practical applications of those characteristics can be 'invented' or identified. At this level, the application is still speculative. There is not experimental proof or detailed analysis to support the conjecture.

TRL 3 – Critical Function or Proof of Concept Established

Active research and development is initiated. This includes analytical studies and laboratory studies to physically validate analytical predictions of separate elements of the technology. Examples include components that are not yet integrated or representative.

TRL 4 – Laboratory testing, validation of Components or Processes

Basic technological components are integrated - Basic technological components are integrated to establish that the pieces will work together.

TRL 5 – Laboratory Testing of Integrated or Semi-Integrated System

The basic technological components are integrated with reasonably realistic supporting elements so it can be tested in a simulated environment.

TRL 6 – Prototype System Verified A representative model or prototype system, tested in a relevant environment.

TRL 7 – Integrated Pilot System Demonstrated

Prototype near or at planned operational system, requiring demonstration of an actual system prototype in an operational environment.

TRL 8 – System Incorporated in Commercial Design

Technology is proven to work - Actual technology completed and qualified through test and demonstration.

TRL 9 – System Proven and Ready for Full Commercial Deployment

Actual application of technology is in its final form - Technology proven through successful operations.

Examples of guidance for specific Environment Agency regulation of relevance

Regulations you may want to consider for your innovation project have been provided below.

Planning Permission

Getting an environmental permit
For further guidance on exemption for R&D projects, contact the relevant environmental regulator.
Control of Major Accident Hazards Regulations
AIR: Carbon Capture and Storage
AIR: Gasification
LAND: Waste management. Please note: Think very carefully about potential waste status of each output and check guidance.
Engage with Marine Maritime Organisation WATER: Effluent to water
WATER: Farming
If you have any further technology or regime specific queries then contact:

Data sharing

This competition is jointly operated by Innovate UK, and the Department of Business, Energy and Industrial Strategy (BEIS) (each an ‘agency’).

Your submitted application and any other information you provide at the application stage can be submitted to each agency on an individual basis for its storage, processing and use Any relevant information produced during the application process concerning your application can be shared by one agency with the other, for its individual storage, processing and use.

Anonymised or aggregated data may be shared with other governmental departments and the devolved administrations.

This means that any information given to or generated by Innovate UK in respect of your application may be passed on to BEIS and vice versa.

Innovate UK and BEIS are directly accountable to you for their holding and processing of your information, including any personal data and confidential information Data is held in accordance with their own policies Accordingly, Innovate UK, and BEIS will be data controllers for personal data submitted during the application.

Innovate UK complies with the requirements of GDPR, and is committed to upholding the data protection principles, and protecting your information The Information Commissioner’s Office also has a useful guide for organisations, which outlines the data protection principles.

Find a project partner

If you want help to find a project partner, contact the Innovate UK KTN.

Contact us

If you need more information about how to apply or you want to submit your application in Welsh, email support@iuk.ukri.org or call 0300 321 4357.
Our phone lines are open from 9am to 5pm, Monday to Friday (excluding bank holidays).

Innovate UK is committed to making support for applicants accessible to everyone.

We can provide help for applicants who face barriers when making an application. This might be as a result of a disability, neurodiversity or anything else that makes it difficult to use our services. We can also give help and make other reasonable adjustments for you if your application is successful.

If you think you need more support, it is important that you contact our Customer Support Service as early as possible during your application process. You should aim to contact us no later than 10 working days before the competition closing date.

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