UK airlines should be offered subsidies, tax breaks and other incentives to encourage them to switch to hydrogen-powered aircraft, an industry pressure group has suggested.

Proposed measures include exempting operators of hydrogen-fuelled aircraft from paying Air Passenger Duty (APD), providing funding to subsidise aircraft acquisition, or including hydrogen within the Emissions Trading Scheme (ETS).

Airbus ZEROe six pod-c-Airbus

Source: Airbus

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The policies have been put forward by Hydrogen in Aviation (HIA) in its Milestone Delivery Report – a document setting out how the UK can position itself as a leader in hydrogen aviation.

Formed in September 2023, the HIA is a cross-industry alliance that comprises Airbus, Bristol Airport, EasyJet, GKN Aerospace, Orsted, Rolls-Royce and ZeroAvia.

It says the switch to hydrogen power as the industry chases its ambitious 2050 net-zero targets represents the “biggest change to the sector since the introduction of the jet engine” and outlines the short-, medium- and long-term steps required to postion the UK at the forefront of the revolution.

“It is without doubt that the UK is well placed to be a global leader in hydrogen – but the opportunity will be gone if we do not act now to build on all the great work that has already been done,” says Johan Lundgren, EasyJet chief executive and the first chair of the HIA.

“The breakthroughs in hydrogen-powered technology happening across the UK are truly astonishing but these advances will be inconsequential if we fail to complement them with the appropriate skills, infrastructure, investment and regulation needed to support hydrogen aviation.”

While airports will need to make sizeable capital investments in the coming decades to prepare new fuel storage and distribution infrastructure, “airlines will face similar hurdles”, it says.

“Hydrogen-powered aircraft represent a major leap forward, but the initial stages of adoption will face significant financial barriers,” the report says.

It suggests several measures to encourage their uptake. These include the creation of a “hydrogen transition fund for aviation”, supporting airlines and airport operators with their initial costs. Additionally, this would bankroll the establishment of a “domestic hydrogen-operated network” – which it likens to Public Service Obligation (PSO) routes.

PSO subsidies “support air service on routes which may not be commercially viable but are essential for social or economic reasons. Similar principles should be extended to hydrogen flights to facilitate the transition,” the report says.

Other policy support mechanisms to ensure the price competitiveness of hydrogen-powered aircraft versus their kerosene-fuelled equivalents could include an exemption from APD for operators and the inclusion of hydrogen in the ETS.

This aligns with the treatment of sustainable aviation fuels and “would serve as an incentive to use hydrogen under the ETS”, it says.

However, although several hydrogen-powered aircraft are in development they are not yet a commercial reality.

To spur further development work, the government should consider several other policies, the report argues. These include changes to research and development funding tule to “allow public investment in aerospace technologies beyond TRL6”.

Money raised through the ETS should also be ploughed back in to aerospace research as additional funding.

Other proposals include measures to promote the production of green hydrogen, address the infrastructure requirements at airports, prepare the Civil Aviation Authority to regulate the coming propulsion shift, and ensure the industry has sufficiently skilled personnel to drive the change.

Separately, HIA member GKN has joined forces with two other aerospace firms and several British universities to develop liquid hydrogen fuel system technologies.

Backed by £20 million ($25 million) of UK government funding, to be matched by £17 million from industry, GKN will work alongside project leader Marshall Aerospace, plus Parker Meggitt and the universities of Bath, Cardiff and Manchester.

It aims to test “scalable liquid hydrogen fuel system technologies” and will culminate “in a fully integrated hydrogen fuel system ground demonstration”.

Max Brown, GKN’s vice-president of technology, says: “The HyFIVE liquid hydrogen fuel system programme will complement our existing world-leading hydrogen electric propulsion programme, H2GEAR.

“This unique industry partnership, combined with the knowledge of leading academics, is a significant step towards a sustainable future for aviation.”

GKN, Marshall and Parker last year announced a collaboration agreement to jointly explore liquid hydrogen fuel system solutions.