Five UK projects investigating whether hydrogen could be used to slash emissions from sectors such as industry and transport have been awarded nearly £30m of government funding.

Kwasi Kwarteng, a UK energy minister, on Tuesday cited hydrogen as one potentially important way of decarbonising some of the more challenging areas of the economy as the UK maps out how it will achieve its target of reducing greenhouse gas emissions to “net zero” by 2050.

Hydrogen has long been talked up by scientists globally as a replacement for fossil fuels in industries such as road transport and shipping but it has never quite taken off, despite General Motors having first produced a hydrogen-powered vehicle as early as 1966.

However, as more countries, including the UK, have adopted net zero emissions goals, companies and governments worldwide are once again investigating whether hydrogen could be used in a range of scenarios, from replacing natural gas for heating buildings to decarbonising heavy industry.

The Department for Business, Energy and Industrial Strategy has awarded £28m to five hydrogen production schemes as part of a wider £90m funding pot for research and projects examining how to reduce carbon emissions from sectors such as industry and homes.

The hydrogen initiatives include what the government claims will be Europe’s first “low-carbon hydrogen production plants”, one on the banks of the Mersey and another near Aberdeen.

The “Hynet” scheme would involve a hydrogen production plant north of Chester, in the north-west of England, and is backed by companies including Cadent, Essar and SNC Lavalin. The “Acorn” project near Peterhead north of Aberdeen, aims to produce hydrogen from natural gas extracted from the North Sea.

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Hydrogen can be produced in several ways: one method involves fossil fuels but the carbon dioxide emitted in the process needs to be captured and stored in depleted oil and gasfields or re-used in alternative industrial processes for it to be considered “clean”. It can also be produced via electrolysis, using excess renewable electricity, but both methods are expensive and critics still question whether hydrogen can be widely deployed.

Mr Kwarteng said on Tuesday: “Cleaning up emissions from industry and housing is a big challenge but today’s £90m investment will set us on the right path as we develop clean technologies like hydrogen.

“This is an important part of our world-leading efforts in eliminating our contribution to climate change by 2050 while also growing our economy, creating up to 2m green collar jobs across the country by 2030.”

Also included in the £90m of awards announced on Tuesday, which come from a £500m “innovation fund” for technologies that could help tackle climate change, are grants for projects looking at new electricity grid models that would allow homes and businesses to be powered by local renewable energy schemes. Some £22m will also go to scientists and engineers researching other ways of decarbonising heavy industry and homes.