IGEM response to Hydrogen blending into the GB gas transmission network consultation

Sep 2025

IGEM response to Hydrogen blending into the GB gas transmission network consultation

The Institution of Gas Engineers and Managers (IGEM) welcomes the opportunity to respond to the DESNZ consultation on hydrogen blending into the GB gas transmission network. IGEM is the global Professional Engineering Institution for gas, representing thousands of engineers, technicians and managers, as well as businesses across the UK and overseas who are a significant part of the emerging hydrogen economy.

IGEM fully supports the transition to a net zero energy system and we are actively engaged in developing the technical standards, safety frameworks and policy evidence base required to enable the safe and effective integration of low carbon gases into the UK’s gas infrastructure – including the standards that describe the engineering requirements for hydrogen blends into the transmission system.

Our role across various industry and governmental groups sees us working directly with gas network companies, manufacturers, consultants, contractors, safety experts, academia, regulators, policy advisors and policy makers, to assess the evidence base and develop informed recommendations on the future of the gas grid.

IGEM supports the introduction of hydrogen blending into the GB gas transmission network as a strategic enabler for the development of a low-carbon hydrogen economy. Blending offers a practical and immediate pathway to stimulate hydrogen production, diversify demand and de-risk early investment in infrastructure. It allows hydrogen to be introduced at scale while the wider supply chain for production, transport, storage and end-use is still maturing - ensuring readiness for future deployment aligned with net zero targets.

Blending also provides a mechanism to optimise the use of curtailed renewable electricity, enabling green hydrogen production and its integration into the gas grid. Transmission level blending, in particular, maximises capacity and complements the capabilities of lower-pressure distribution networks, which are well-suited for local delivery but may face constraints at higher volumes. The introduction of hydrogen certificates would further enhance accessibility, allowing consumers and industries not directly connected to hydrogen producers to participate in the hydrogen market and offset methane use.

IGEM broadly welcome the Department’s minded to position on transmission level blending and we remain committed to working with government, industry and regulators to ensure that blending is implemented safely, efficiently and in a way that supports the long-term decarbonisation of the UK’s energy system.

Question 1

Do you agree with the assessment of the impacts of blending up to 2%, 5% and 20% hydrogen by volume on NTS connected end users? Are there any further operational and/or financial impacts on end users we should consider?

IGEM broadly agree with the assessment presented in the consultation regarding the impacts of hydrogen blending on NTS-connected end users.

We welcome evidence from Progressive Energy’s Hydrogen Acceptability Study, indicating the technical feasibility of up to 20% by volume blends for most industrial and commercial applications with varying degrees of modification.

The Arup study indicates that recipients of both 2% and 5% blends will require varying degrees of modification, from minor to moderate, depending on the assets involved. We recognise that the modifications required, and therefore costs, are likely to increase with the percentage of hydrogen blend. We understand that National Gas is continuing to work with its stakeholders to gather more detailed information on the impact of different blend proportions and variability on connected assets.

A mechanism for funding further research, feasibility studies, innovation and investment in the necessary modifications will be needed to deliver hydrogen blending into the gas networks.

Other research conducted by Marcogaz indicates that the operational or financial impacts of introducing hydrogen at a 5% blend are expected to be readily manageable. Crucially, the broader economic benefits, particularly in advancing the UK’s growth agenda, are likely to significantly outweigh the costs of adapting to small variations in gas quality.

Question 2

Do you agree that if transmission blending is enabled and commercially supported by government, the most appropriate mechanism would be via the Hydrogen Production Business Model (HPBM)?

IGEM supports the proposal to use the Hydrogen Production Business Model (HPBM) as the primary mechanism for commercial support. Although hydrogen blending would benefit from a bespoke support model, the time taken to design, administer and manage the model would be counterproductive. The existing HPBM is the most appropriate mechanism at this time and aligns with the government’s current strategy to mitigate risks in early-stage hydrogen production.

As emphasised in the consultation document, it will be crucial for producers holding existing contracts to be able to make necessary adjustments efficiently to accommodate blending, as these producers will be among the first to face the volume-related risks.

Regarding the Department’s concern that blending could ‘crowd-out’ other alternative hydrogen offtakers, we believe that this scenario is low risk as a consequence of the market’s lack of maturity – and could be adequately mitigated thorough appropriate market frameworks to incentivise direct offtakes over blending.

While the HPBM addresses system-level considerations, there is a distinct need to support individual end-users in modifying their assets to accept blended gas. Third party analysis commissioned by National Gas indicates that hydrogen blending lowers risk for hydrogen producers and enables them to access lower cost debt to fund their projects, reach final investment decisions earlier and decrease their hydrogen strike price – This results in a lower overall subsidy requirement, the savings of which could be reallocated to end-users for any required modifications.

This support for end-users should be delivered via a separate mechanism from the HPBM, as it targets site-specific needs rather than whole-system changes. Importantly, not all end users will require the same level or type of support, so a tailored approach is essential and should be considered independently from the HPBM.

IGEM recommend that hydrogen blending in the NTS be supported by the introduction of a certification scheme, enabling consumers (particularly those not directly connected to hydrogen producers or industrial clusters) to purchase hydrogen certificates and demonstrate their use of low-carbon gases. This approach facilitates access to hydrogen without the need for physical infrastructure linking production and demand sites, thereby broadening participation across sectors and geographies and further supporting growth of the hydrogen economy. It also allows gas-fired power stations to offset methane use through certified hydrogen blends (or biomethane). To ensure alignment with existing decarbonisation frameworks, the certification scheme should be linked to the UK Emissions Trading Scheme (ETS), with administration by the Low Carbon Contracts Company (LCCC), based on the volume of hydrogen blended and natural gas displaced in the grid.

IGEM encourage DESNZ to learn from the pioneering work on hydrogen blending in Australia, including the certification approach, similar to biomethane in the UK, where consumers can purchase the hydrogen energy content that is blended into the gas system. This approach would enable material volumes of hydrogen to be claimed for low carbon flexible power generation by 2030, and similarly be used by industrial consumers and other demand sectors.

Question 3

Do you agree with our minded to position, if blending were enabled, to allow both the gas transmission network operator and gas shippers to purchase hydrogen produced for blending? Please provide evidence to support your response.

IGEM supports DESNZ’s minded-to position to allow both the gas transmission network operator and gas shippers to purchase hydrogen produced for blending. A hybrid purchasing model offers the most flexible and commercially viable route to market for hydrogen producers while helping to maximise the strategic and economic benefits of blending.

Network operators can use hydrogen to meet shrinkage obligations, reducing scope one emissions. Shippers, meanwhile, can facilitate hydrogen sales to industrial and commercial users, expanding market access and enabling distributed decarbonisation. This flexible approach enables more dynamic trading and balancing of hydrogen volumes and is essential to ensure that hydrogen producers have a reliable route to market – Particularly in the early stages of the hydrogen economy when demand may be variable or geographically dispersed.

As seen in the biomethane market, shippers can support the development of commercial relationships and drive the growth of investment, innovation and the hydrogen market.

Moreover, the hybrid model aligns with existing gas market arrangements and can be implemented with minimal regulatory change.

Question 4

Do you agree that working within the current gas billing arrangements will not result in an increase in billable usage and gas bills for end users connected to the NTS, should transmission level blending be enabled by government?

Yes. We agree that that existing billing arrangements – based on measured calorific value (CV) and volume – can accommodate up to 5 vol% hydrogen blending without increasing billable energy usage for those connected to the NTS, assuming accurate metering and pricing parity.

National Gas and the GDNs are collaborating to identify solutions to issues such as CV capping, arising from blended gas supplies into both the NTS and Local Distribution Zones (LDZs). The cross network Real Time Settlement Methodology project, led by SGN, aims to establish a fair, practical and flexible future billing system that can accommodate the variability of low carbon gases and CVs, in real-time.

Question 5

Do you agree with our minded to position to only consider further whether to support and enable transmission blending of up to 2% hydrogen by volume? Is there a maximum level of blend that would be feasible with minimum modifications for sites connected to the NTS?

IGEM welcome the government’s minded to position on up to 2% hydrogen blend by volume. If enabled, this represents a significant step forward in developing the UK’s hydrogen economy – representing up to 5 TWh of energy, saving almost 1 million tonnes of carbon annually. This support demonstrates to industry, investors and the public that the government is taking a meaningful and pragmatic step towards building the hydrogen economy and that there will be real and near-term demand for hydrogen.

However, there is strong support for a more ambitious 5% blending limit. It is argued that a 5% blend provides a stronger market signal and creates a larger, more stable demand for low-carbon hydrogen – justifying the significant scaling up of infrastructure and supply chain investment.

From our discussions with stakeholders, it is evident that there is still more work to do to fully assess the impact of different blend proportions and variability on all connected assets, as well as the costs associated with modifications. National Gas continue to work closely with stakeholders to further understand their needs, for example, the impact of hydrogen blends between 2% and 5% on GDN offtake sites.

IGEM support the argument that there is insufficient information on all impacts, for government to make an accurate cost benefit analysis at this stage – however this is not a justification for limiting the blend to 2%. A 5% blend has been proven to be technically feasible, with appropriate modifications and engineering innovation, so the challenge could be considered more one of practicality and cost. The Department should ensure that any issues associated with the safe operability of sites and any reservations based solely on efficiency or commercial factors are not conflated.

A 5% minded to decision now, will help unlock the necessary funding to support further research, gather more quantitative data and enable the market to do the prerequisite work to support higher blending limits. Capping the blend limit at 2% is a disincentive to do the necessary further analysis and is a missed opportunity to maximise the strategic and economic benefits of hydrogen blending.

Given the time it takes to make changes to GS(M)R and the time it will take to grow blend proportions, it may be prudent for government to allow blending up to 5%, via a mechanism that allows for blending up to 2% until a conditional trigger is met for the limit to increase to 5%. This allows time for modifications to be made (such as at GDN offtake sites) while production scales, at the same time as clearly indicating to industry and investors that the government is ambitious and committed to building a thriving hydrogen economy.

Question 6

We welcome feedback on the economic assessment presented and any further analysis on the costs and benefits of transmission blending. Please provide any additional information on the costs of any required modifications or mitigations required for NTS connected sites to be able to accommodate a blend of up to 2% hydrogen by volume.

IGEM acknowledges the complexity of the economic case for transmission level blending. The consultation document rightly highlights the likelihood of significant potential costs to NTS end users. However, as described in our answer to question 2, National Gas’s analysis indicates that the savings realised through hydrogen blending could offset the estimated additional costs required to integrate hydrogen within the network and support the implementation of end user modifications.

Evidence suggests that modification costs will be highly site-specific but are not yet fully known – as such IGEM urges government to support end users to conduct feasibility studies to assess modification needs and costs across their individual sites and assets. Moreover, further work should be undertaken to explore blend isolation strategies and deblending alternatives, particularly for blend-sensitive industrial users.

Sources

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