U.K.'s energy regulator, Ofgem, has approved £96 million ($128 million) in funding for Cadent Gas to advance a critical hydrogen pipeline project in the U.K., the company announced Friday.

The funds, awarded on June 20, will cover the engineering design, planning, and public consultation for a new 140-kilometer (approx. 87-mile) segment of the East Coast Hydrogen (ECH) Pipeline.

According to the announcement, this new section will connect the industrial hubs of Humberside with the East Midlands, forming a key link in a larger network intended to supply low-carbon hydrogen to heavy industries, such as steel, chemical, and power generation. 

Project backers say hydrogen is a necessary zero-emission option for high-temperature industrial processes where electrification is not viable, with pipeline being a central part of the broader East Coast Hydrogen project, a coalition led by Cadent Gas, National Gas, and Northern Gas Networks. 

This design phase is a significant step for the ECH initiative, which is currently supported by 122 members of the coalition. The group, which began with 37 partners in 2021, has grown significantly, uniting hydrogen producers, manufacturers, airports, hospitals, and local councils.

The pipeline is designed to transport both "green" hydrogen, produced via electrolysis, and "blue" hydrogen, derived from natural gas with carbon capture technology, complementing the region’s planned 11.6 gigawatts of hydrogen production capacity.

The design involves a combination of a newly built pipeline, which requires specialized alloys to protect the metal from hydrogen, and upgraded sections of the existing natural gas grid.

Ofgem's funding is part of a wider £500 million ($666.6 million) government commitment to regional hydrogen transport and storage, supporting the U.K.'s goal of reaching net-zero emissions by 2050.

The initiative also supports National Gas’s "Project Union," an ambition to create a 1,500-mile (approx. 2,400-km) hydrogen "superhighway" across Great Britain by 2035. Planners envision future spurs from the main artery feeding industrial parks, airports, and refueling stations.