England's push to become a global leader in hydrogen and carbon-capture technologies is colliding with a water system already straining under decades of underinvestment, rising climate volatility, and outdated regulation. Fresh research warns that the country's most ambitious industrial decarbonisation projects could surpass available water supplies within years, escalating political tensions between the government, the Environment Agency, and water companies.

A new study from Durham University, commissioned by the water retailer Wave, models how England's major industrial clusters will affect national water resources. The work suggests that emerging technologies designed to support the UK's net-zero strategy, particularly hydrogen production and carbon capture, will drive water demand far beyond what current infrastructure can support.

Hydrogen Strains Water

Prof Simon Mathias, who led the research, said, "Decarbonisation efforts associated with carbon capture and hydrogen production could add up to 860 million litres per day of water demand by 2050. In some regions, for example, Anglian Water and United Utilities, deficits could emerge as early as 2030."

The modeling shows that the Humberside industrial cluster, Britain's largest site for proposed hydrogen and carbon-capture facilities, could push Anglian Water into deficit almost immediately, with a possible shortfall of 130 million litres a day by mid-century. Similar pressures in north-west England put United Utilities at risk of a 70-million-liter daily deficit by 2030, even before taking household and agricultural demand into account.

United Utilities rejected the study's projections, saying the deficit estimates are "overstated as regional water management plans already make allowances for the predicted hydrogen demand". Anglian Water said the figures fall at the upper end of its internal modeling but acknowledged that new strains are emerging. The company faulted Ofwat for restricting long-term investment, arguing that regulatory controls have constrained its ability to build resilient supply systems.

Net-Zero Water Crunch

The warning comes at a moment when England's water governance is already under scrutiny. Companies have been criticised for high leakage levels, losing roughly 2.7 billion litres a day, while continuing to pay dividends and executive bonuses. Meanwhile, the Environment Agency has repeatedly warned that England's rivers are degrading, groundwater reserves are falling, and climate volatility is pushing the country into a new era of hydrological stress.

Water UK, the industry's umbrella group, said that national water-supply plans do not yet count the water needs of major net-zero projects, blaming forecasting gaps on the Environment Agency. "After being blocked from building reservoirs for more than 30 years, we have finally been given approval to build 10," a spokesperson said. "The problem is that the Environment Agency's forecasts... do not account for the government's economic or low-carbon ambitions. Hydrogen energy needs a lot of water, so correcting these forecasts is increasingly urgent."

Wave's Nigel Corfield said he commissioned the study because industrial users have no guaranteed water rights. "Water companies don't have the same statutory obligations for businesses as they do for households, and we sensed that there was going to be a bit of a problem," he said. "Government and Ofwat are allowing businesses and these big projects to sort themselves out in terms of how they're going to get their water."

Climate-driven shortages

The government maintains that the hydrogen rollout is on track, insisting that each project must supply evidence of sustainable water sourcing. A spokesperson said, "We face a growing water shortage in the next decade, and that is one of the reasons we are driving long-term systemic change to tackle the impacts of climate change."

But experts argue that deeper structural failures are at play. England's water infrastructure, from ageing pipes to outdated data systems, has long lagged behind the growth in demand, population, and economic development. Climate change intensifies these pressures: the UK is experiencing more frequent droughts, hotter summers, and altered rainfall patterns that reduce groundwater recharge. Several Environment Agency assessments warn that without systemic change, England will face an annual shortfall of up to six billion litres a day by 2055.

Dieter Helm, professor of economic policy at the University of Oxford, argues that the sector's problems stem from antiquated governance rather than absolute scarcity. "It's worse than an analogue industry," he said. "Until recently, some water companies didn't even know where their sewage works were, let alone whether they were discharging into rivers. The information set is extremely weak." Helm says the system needs real-time monitoring of every abstraction and discharge, managed by an independent catchment regulator. "You should never be able to have an abstraction without an abstraction meter," he said. "And it should be a smart meter, automatically reporting."

Decarbonisation dilemma

England's water planning has historically prioritised household supply, leaving industrial users, especially new sectors like green hydrogen and carbon capture, in a grey zone. This mismatch is now raising questions about how the country will balance the needs of decarbonisation with ecological limits and public demand.

The broader concern is that rapid industrial growth tied to the UK's net-zero ambitions is unfolding faster than the regulatory system can adapt. Hydrogen and CCS projects require "ultrapure" water for electrolysis and large volumes for cooling. Many are located in regions already facing water stress, such as the east of England and the northwest, which also have some of the country's most depleted rivers and aquifers.

These strains sit atop chronic issues: sewage spills, escalating pollution fines, and an ageing Victorian-era infrastructure that leaks nearly a quarter of the water put into the system. Long-delayed reservoir projects, stalled inter-regional water transfers, and fragmented institutional responsibilities add to the challenge.

Net-zero strain

Against this backdrop, the government has allocated £104 billion in private-sector investment for leakage reduction and nine new reservoirs, alongside £10.5 billion in public funding for flood defenses. But critics say that even these commitments fall short of what is needed to prepare England for a hotter, drier climate and an industrial sector increasingly dependent on water-intensive technologies.

As officials warn that England could face nationwide drought next year without sufficient winter rainfall, the clash between decarbonization goals and water availability is sharpening. The country's ability to meet its net-zero commitments is now inseparable from the question of whether its water system, fractured, overstretched, and disputed, can support the transition.

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