As the UK ramps up efforts to hit its net-zero targets, green hydrogen is fast becoming a critical pillar of the country's clean energy strategy. At the heart of this shift is the government’s Hydrogen Allocation Round (HAR ) programme — a series of competitive funding rounds designed to jumpstart low-carbon hydrogen production and scale a domestic market at pace.
These funding rounds are vital because they provide long-term revenue support through the Hydrogen Production Business Model (HPBM), giving developers the financial certainty needed to invest in infrastructure, create jobs, and decarbonize heavy industry, transport, and energy systems.
The first round (HAR1), launched in 2023, offered early support to a select group of electrolytic hydrogen projects, laying essential groundwork for the sector.
Building on that momentum, the second round (HAR2) shortlisted 27 projects, aiming to deliver up to 765 MW of hydrogen production. The second Hydrogen Allocation Round (HAR2), which the government has previously said will support up to 875MW of combined capacity, includes projects purporting to be larger than 50MW such as RWE’s Pembroke Net Zero Centre and first 200MW phase of 600MW Grangemouth green hydrogen project in Scotland which has chemicals giant INEOS lined up as its first customer and Uniper’s Humber H2UB which aims to supply a refinery in England’s industrial northeast.
This will be the first time green hydrogen schemes of this size have been earmarked for UK subsidies. The shift signals growing confidence, maturing infrastructure, and a rising number of serious players entering the field.
The UK aims to become a global leader in low-carbon hydrogen production, with a target of 10 GW of low-carbon hydrogen capacity by 2030. These projects in HAR2 significantly improve the likelihood of meeting that capacity target.
In this blog, we analyse HAR2's shortlist to uncover key trends, emerging leaders, and critical gaps in the UK's hydrogen market and break down what HAR2 tells us about the state of the UK hydrogen market:
- How project scale and ambition are evolving
- Where regional hydrogen clusters are emerging
- Which developers are scaling, and who the new entrants are
- How hydrogen offtake is diversifying across industries
- And what policy and commercial signals mean for who will ultimately get funded
With the third round (HAR3) already on the horizon, understanding the landscape — from capacity estimates to market positioning — is vital. Read on for MapStand’s deep dive into the UK's green hydrogen journey so far, and what it means for the road ahead.
From HAR1 to HAR2: Scale and Momentum
In 2023, the inaugural round, HAR1, awarded £2 billion ($2.6bn) to 11 projects, securing around 125 MW of electrolytic hydrogen capacity. However, delays in finalising agreements left many of those projects in limbo for nearly a year. By December 2024, only three projects, totalling 31.8 MW, had formally signed revenue support contracts.
HAR2 builds on this foundation with significantly more ambition. In its shortlist, the UK Government has named 27 green hydrogen projects, with a disclosed capacity of 765 MW. While this falls short of the government’s original 875 MW target, MapStand’s analysis — incorporating estimated capacities for projects with undisclosed figures (~23% of the shortlist) — suggests a potential total capacity closer to 1,000 MW.
Figure 1 – MapStand analysis graph chart showing total capacity MW for HAR1 awarded in comparison to HAR2 shortlisted projects
This means HAR2 marks a 225% increase in average project size compared to HAR1 (from 11.38 MW to 37 MW), a clear signal of increasing market confidence and technological maturity. It is also the first time that green hydrogen projects above 50 MW — such as RWE’s Pembroke Net Zero Centre, INEOS’s 200MW Grangemouth Phase 1, and Uniper’s Humber H2UB — have been earmarked for UK subsidy.
Map of shortlisted HAR2 projects compared to HAR1 projects
Figure 2 – Map of the United Kingdom outlining locations for HAR1 awarded and HAR2 shortlisted projects
A comparative look at the geographic footprint of HAR1 and HAR2 projects reveals notable trends. While Humber and Teesside remain key hubs, HAR2 introduces early indicators of a shift in spatial momentum:
- Scotland hosts 8 out of 27 projects (30%), compared to just 2 out of 11 in HAR1 (18%)
- England and Wales, by contrast, see a proportional decrease in representation
- Emerging project clusters are being seen in the Midlands, South East, and South West
This distribution hints at the UK's ambition to diversify its hydrogen economy regionally, helping to decentralise benefits and foster broader clean energy adoption.
Figure 3 – MapStand analysis of HAR1 awarded and HAR2 shortlisted projects by country within the United Kingdom
Developer Landscape: Momentum, Scaling, and New Entrants
Figure 4 – MapStand analysis of repeat developers compared to new entrants with HAR1 awards and HAR2 shortlist allocations.
Figure 4 above portrays which hydrogen project developers are looking into growing their footprint. Specifically, by looking at companies involved in both HAR1 and HAR2 we can see a comparison of repeat developers and a huge influx of new entrants, highlighting market consolidation or diversification. There are four developers (Carlton Power, EDF, Hyro Energy UK and ITM Power) from HAR1 are doubling down in HAR2 — signalling rapid scaling ambitions. 
Figure 5 - MapStand analysis of total capacity in MW per developer in the HAR2 shortlist
In terms of developers leading the pack RWE is responsible for highest capacity in MW followed by EDF, then Uniper, as shown in figure 5. This combination of scaling incumbents and fresh players is encouraging: the sector is no longer just about experimentation but about maturing infrastructure and long-term commitment pointing to widening market participation.
Offtake Evolution: From Industry to Integrated Use
Figure 6 - Pie chart comparison of HAR1 awarded projects and HAR2 shortlisted projects which break down hydrogen offtake by sector: transport, power, industry, heating, ammonia, steel and refining.
The evolution of hydrogen offtake between HAR1 and HAR2, illustrated in figure 6, shows diversification in end-use markets:
- HAR1 offtake was primarily centred around industrial clusters with use cases of Power-to-X, heating, and e-fuels
- Notably, projects of HAR2 are expanding further and now target sectors like Ammonia, Steel, and Refining, indicating a broader strategy to embed hydrogen into multiple value chains
- This change reflects a maturing vision for how green hydrogen can serve cross-sectoral decarbonisation beyond its early adopters.
Policy Expectations and Commercial Realities
While no budget has yet been announced for HAR2, the government has set clear commercial expectations:
- Projects must deliver "value for money" and demonstrate cost reductions over HAR1, where guaranteed hydrogen prices reached $12/kg
- HAR2 will continue to use Contracts for Difference (CfDs) to offer 15-year revenue certainty — but not all shortlisted projects will secure final funding
- The UK Government has emphasised streamlining commercial negotiations and reinforcing clarity around eligibility and timelines for HAR2 to prevent similar delays between project selection and contract finalisation as the case with HAR1. However, with a more ambitious scale and a wider range of project types and sizes in the mix, the risk of similar delays remains — especially as pressure mounts to ensure value for money and cost efficiency. The sector will be watching closely to see if HAR2 delivers both faster execution and stronger investor confidence.
This means competition is fierce, and only the most viable projects — in terms of scalability, cost, and market fit — are likely to progress.
Breaking Down the Barriers: Can HAR2 Projects Overcome These Hurdles?
While HAR2’s shortlist signals bold ambition, history shows that funding alone doesn’t guarantee delivery. Here’s what could slow progress — and who’s stepping in to help:
- Grid Constraints: Projects like RWE’s Pembroke face multi-year waits for connection upgrades. National Grid’s "5-Point Hydrogen Plan" aims to streamline this, but regional bottlenecks persist. “Lack of grid infrastructure is the single biggest blocker to deployment of new low carbon power. As well as building new grid infrastructure, we need to make the connections process work better, and use the existing grid we have more efficiently.” - Tom Glover, RWE UK Country Chair
- Permitting Delays: Scotland’s 8 HAR2 projects must navigate local objections and environmental reviews. The UK’s new "Hydrogen Permitting Taskforce" could cut timelines by 30% — if implemented in time.
- Offtake Uncertainty: INEOS’s Grangemouth project hinges on ammonia demand, which relies on untested carbon pricing.
HAR2’s success depends on parallel fixes — from grid reforms to standardised permitting. Investors should scrutinise projects not just for scale, but for pathways around these barriers.
Conclusion: Intelligence Is Advantage in the Hydrogen Race
HAR2 is not just a list of hopefuls. It is a barometer of how far the UK hydrogen market has come — and how fast it is evolving.
From project scale to developer ambition, geographic diversification to offtake innovation, this shortlist reveals where the sector is headed and where the gaps remain.
At MapStand, we equip our partners with deep geospatial and commercial intelligence, including:
- Precise project locations
- Full MW capacity breakdowns
- Developer and ownership networks
- Sector-by-sector offtake analysis
With HAR3 on the horizon, location and market intelligence will be the deciding factor in who succeeds. If you're navigating the hydrogen economy — whether as an investor, policymaker, or developer — MapStand gives you the edge. Contact our team for more information on the hydrogen market in UK.