Thousands of new jobs could be created by investing in low-carbon hydrogen fuel to power vehicles and heat homes, the government says.
Ministers have unveiled a strategy for kick-starting a hydrogen industry, which they say could attract billions of pounds in investment.
Business Secretary Kwasi Kwarteng said the fuel was also essential for UK efforts to reach net zero emissions.
He said it had the potential to provide a third of UK energy in future.
Because of the current higher cost involved in producing hydrogen compared to existing fuels, subsidies have been proposed to overcome the gap. The government has launched a consultation on this plan.
Labour also backs hydrogen's potential, but said the government had failed to invest as much as other countries.
Using hydrogen gas as a fuel produces no carbon dioxide (CO2) pollution. It can be used to power fuel cells - devices that generate electricity through an electrochemical reaction - used in a turbine for electricity or burned in a boiler and vehicle engine.
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