The independent energy and assurance firm said cost remains the “fundamental difficulty” limiting hydrogen production in the country.

It also said carbon capture and storage (CCS) faces similar cost barriers.

DNV shared its thoughts in its annual Energy Transition Outlook briefing, on which Hari Vamadevan, Senior Vice-President of DNV, said both markets have seen a downward trend, despite the technology being largely ready for deployment.

“I think the technology is there. It’s got everything to do with cost,” he noted.

DNV forecasts UK hydrogen production reaching 750,000 tonnes per year by 2030, far below the government’s ambition to deploy 10GW of hydrogen production capacity.

It also expects the UK to capture just two million-tonnes-per-annum (mtpa) of carbon dioxide by 2030 of a targeted 20-30mtpa.

Industry groups have also warned that policy delays are slowing project development.

The Hydrogen Energy Association recently warned of sluggish UK government strategy hindering the sector with its Hydrogen Allocation Round (HAR) funding schemes remaining disjointed.

The first ten green hydrogen projects selected under HAR only signed subsidy agreements after a year-long delay, while the second funding round remains unresolved with the final selection out of 27 shortlisted projects still unnamed.

In terms of CCS, the UK has committed almost £22bn ($29bn) over 25 years for major carbon capture, utilisation and storage projects in October 2024.

Vamadevan said this initiative could easily stall like the HAR without the government “providing a path” for how they will release the funding.

Sarah Kimpton, the report’s co-author and DNV’s Energy Transition Director signed off the briefing with hopeful words for hydrogen’s role in the UK.

“When we’re looking at the way electrification is going and how flexibility can be very important, having hydrogen in the mix for dispatchable generation is going to be really, really, important…I think its days will come back, [they’ve] got to,” she added.