Policy record
Hydrogen Production Business Model (HPBM) / Low Carbon Hydrogen Agreement (LCHA)
Hydrogen Production Business Model (HPBM) / Low Carbon Hydrogen Agreement (LCHA) policy record on H2Prism, with its status, summary, checked official source, and record date.
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8 sourced values · 0 earlier records
JurisdictionGBR
Legal statusin_force
Instrumentproduction_subsidy
Effective2022-07-01
Policy details
SummaryA CfD-style revenue support mechanism where eligible low-carbon hydrogen producers sign a 15-year Low Carbon Hydrogen Agreement with the Low Carbon Contracts Company (LCCC), receiving a 'strike price' top-up payment when the hydrogen market reference price falls below the agreed strike price, and paying back when it exceeds it.
Key thresholdsEligible technologies: electrolytic hydrogen (HAR1, HAR2); CCUS-enabled hydrogen (separate process); gas splitting with solid carbon and biomass/waste gasification (without CCUS) eligible from HAR2 onwards. Projects must meet the Low Carbon Hydrogen Standard (max 20 gCO2e/MJLHV). HAR1 targeted 250 MW; 11 projects awarded totalling 125 MW at a weighted average strike price of £241/MWh H2. HAR2 targets up to 875 MW; 27-project shortlist announced April 2025; awards expected early 2026. Contract term: 15 years.
Support valueHAR1: >£2 billion revenue support committed; weighted average strike price £241/MWh H2. HAR2 strike prices not yet publicly disclosed (due diligence ongoing as of mid-2025); government expects significant cost reduction versus HAR1.
Practical implicationDevelopers must win a competitive allocation round (HAR) and sign an LCHA with LCCC to access revenue support; HAR1 awarded only half the targeted capacity, so projects face real competitive risk, and HAR2 winners will not be known until early 2026.
Official source
| Source | Publisher | Checked |
|---|---|---|
| Open official source ↗ | www.gov.uk | 2026-08-31T17:47:03Z |