UK energy bills to face new green levy for hydrogen projects

The UK Labour government plans to introduce a new green levy, known as the gas shipper obligation (GSO), to household energy bills starting in 2027. This levy is expected to initially add up to £7.10 to average gas and electricity costs to subsidize hundreds of millions of pounds for clean hydrogen projects. The funds will support an initial round of 10 green hydrogen schemes, with 27 additional projects already shortlisted.

The introduction of the GSO comes alongside other green levies and an expected £60 rise in Ofgem’s price cap this October, which may offset the Prime Minister’s pledge to save families £45 annually through VAT removal on electricity.

Separately, the Scottish Government is expected to announce financial support for energy bills specifically for individuals with terminal illnesses. This initiative is part of the programme for government to be presented by John Swinney at Holyrood, outlining priorities through 2031.