UK Export Finance (UKEF) has agreed to guarantee a £400mn sustainability-linked facility for a developer of hydrogen technology, as the government works to strengthen Britain’s role in global clean energy supply chains.

The export credit agency will cover 80% of a five-year loan from Bank of America, HSBC and SMBC to Johnson Matthey, a London-headquartered developer of various types of sustainable technologies including metals recycling and green hydrogen.

Signed in late March, the UKEF-backed finance package will boost research and development in these types of technologies, in turn supporting jobs across the UK.

International trade secretary, Anne-Marie Trevelyan, says such investment will help “blast domestic energy production higher than ever… securing the future supply of cleaner energy at home and helping us to export abroad”.

“With further investment in hydrogen technologies, we can heat our houses, have fleets of hydrogen HGVs across the country and provide the fuel needed for heavy to abate sectors, such as steel or glass making,” UKEF says.

As part of the loan’s sustainability-linked structure, Johnson Matthey has committed to reduce its greenhouse gas (GHG) emissions and to decarbonise its energy procurement. The company’s progress will be independently monitored by a third party.

Governments and private sector institutions have increasingly talked up the role of green hydrogen in helping countries ditch fossil fuels, with this particular version of the gas created from renewable energy sources.

The UK published a hydrogen strategy in August 2021, which laid out how low-carbon hydrogen could partially replace high-carbon fuels in industrial production, as well as be used for power, heating and transport. The country currently has almost no low-carbon hydrogen output, but the government has set a target of 5GW of production capacity by 2030.

The document suggests that by 2028, the UK’s supply chains and skill base will be “well positioned” to support increased exports of technology, expertise, and “potentially hydrogen”.

Australia is leading the charge to become a major producer and exporter of the fuel, while European nations such as Germany and the UK are keen to cement their position as suppliers of green hydrogen technology and infrastructure.

Nonetheless, NGOs and campaign groups have voiced concerns over hydrogen’s central role in policymakers’ paths towards net-zero emissions.

Client Earth argues it is currently “unclear whether green hydrogen… will be available at a reasonable cost and at scale in the near future” and so cannot, in and of itself, justify developing new gas infrastructure.