Hydrogen Risk Management: Overcoming Safety, Policy and Resilience Challenges in the Energy Transition

By Inverroy Crisis Management Ltd

David Payne is a Senior Consultant at Inverroy Crisis Management, where he leads resilience consultancy for renewable and low-carbon energy clients. With extensive experience in risk management, business continuity and crisis preparedness, David supports organisations operating at the forefront of the energy transition. In this article, he explores hydrogen’s growing role in decarbonisation and examines the critical risks organisations must address as the sector scales, including safety challenges, immature supply chains and evolving regulatory frameworks.

Hydrogen is increasingly seen as a vital component of the global energy transition, an energy vector capable of decarbonising sectors where electrification alone cannot deliver. Governments are rolling out national hydrogen strategies, major infrastructure investments are underway, and, in the UK, pilot projects are rapidly moving toward commercial deployment.

Yet as the sector scales, the risks and uncertainties surrounding hydrogen become more visible. Hydrogen infrastructure is not simply an extension of existing energy systems; it introduces new technologies, supply chains, interfaces, and regulatory challenges. For organisations entering this space, a robust approach to risk, resilience and continuity is essential.

New(ish) Technologies, New Hazards

I say new-ish because Hydrogen has been used successfully and safely for many years in countries like the USA, demonstrating that the experience is available. However, whether this experience is available in sufficient quantity or at the right location is a separate challenge and highlights a skills shortage in the hydrogen sector that is beyond the scope of this article, but remains a key issue. Consequently, for many organisations, the lack of available experience combined with the rapid pace of technical development, certainly in the case of ‘green hydrogen’, effectively makes this ‘newer’ technology than some may argue it really is.

For those without prior experience, Hydrogen’s physical characteristics create distinctive safety challenges. As the smallest and lightest molecule, hydrogen disperses quickly, can leak through materials traditionally used for natural gas, ignites across a wider flammable range, is colourless and odourless, and burns with an almost invisible flame. Hydrogen embrittlement also poses risks to pipelines, storage vessels and valves.

While parallels exist with oil and gas, hydrogen is not simply ‘natural gas with a twist’. Risk managers must understand hydrogen’s unique technical profile and ensure that risk registers, operational controls and emergency plans accurately reflect these nuances.

Hydrogen production and storage facilities also bring new operational demands.

Electrolyser sites require high-voltage systems and water treatment processes, while compressed and liquefied hydrogen storage introduces high-pressure and cryogenic hazards. Even in small-scale deployments, the potential for rapid escalation during an incident demands high levels of preparedness.

As organisations experiment with blending hydrogen into gas networks, fuelling vehicles or powering industrial processes, unfamiliar interfaces between old and new systems add further complexity. Seamless integration cannot be assumed; it must be risk-assessed, tested and monitored.

An Emerging Sector with Immature Supply Chains

Hydrogen supply chains remain in early stages of development. Many critical components—from electrolysers to compressors—are produced by a limited number of manufacturers, often located in specific regions. This introduces notable continuity risks. A single point of failure, geopolitical uncertainty or a delay in component certification can disrupt entire projects.

At the same time, organisations may underestimate the importance of infrastructure dependencies, such as water supply, renewable electricity availability, and transport routes for specialised equipment, including the ‘finished product’. As the sector expands, these dependencies will become increasingly interlinked.

Risk managers should treat hydrogen supply chains not as established ecosystems but as emerging networks that require proactive continuity planning, diversified sourcing, and contingency strategies.

Regulatory and Policy Hurdles

One of the most significant challenges to hydrogen deployment is the speed at which policy and regulations evolve, often slower than industry ambition.

Inconsistent standards: Countries and regions are developing potentially divergent safety codes, performance standards and certification schemes. Consequently, organisations operating internationally may need to navigate incompatible frameworks and shifting compliance requirements.

Permitting delays: Hydrogen projects often face lengthy approval processes, partly because regulators and local authorities are still developing expertise in hydrogen. This can slow development timelines and increase project uncertainty.

Policy-driven commercial risk: Hydrogen economics depend heavily on government incentives, carbon pricing mechanisms and long-term policy commitments. Sudden political changes or delays in funding programmes can significantly affect project viability.

How Risk Managers Can Support the Hydrogen Value Chain

Inverroy’s experience shows that we, as Risk Managers and Business Continuity specialists, can support the hydrogen sector by helping to build the resilience foundations required for safe and scalable hydrogen deployment. This support spans the whole value chain and should include:

Risk Assessment: Identification and evaluation of hydrogen-specific risks—technical, operational, regulatory, commercial and reputational—and integration of these into existing frameworks. Doing this early in the project timeline gives leadership teams a clear understanding of vulnerabilities and priorities.

Business Continuity Planning: Given the immaturity of hydrogen supply chains, continuity planning is vital. Mapping of critical dependencies, identification of single points of failure, and the design of adaptable continuity strategies that evolve with market and policy developments.

Crisis Management and Emergency Preparedness: Hydrogen incidents can escalate quickly; therefore, developing crisis management structures, delivering scenario-based training, and conducting realistic exercises are vital to ensure teams are ready to react and respond decisively under pressure. However, incidents can and do occur before hydrogen sites become operational, and at this stage are likely to involve a subcontractor or other third parties. Nevertheless, the negative press associated with such an incident on what is probably already a contentious site should not be underestimated, meaning that Risk Managers must be aware of third-party response preparedness if their project is not to be impacted by the actions, or lack thereof, of others.

Stakeholder Engagement and Communication: Hydrogen projects often face public uncertainty, technical scrutiny and regulatory sensitivity. Consequently, building effective communication strategies that promote trust and transparency, and that include safety and emergency response preparedness and actions, is vital.

What Risk Managers Should Prioritise Now

As hydrogen projects accelerate, risk and safety professionals should focus on:

• Embedding hydrogen competence at all levels of the organisation.

• Recognising that uncertainty, in supply chains, regulation, and technology, is inherent and must be planned for.

• Strengthening scenario planning, including cascading and low-likelihood, high-impact events.

• Ensuring cross-functional collaboration between engineering, operations, safety, and commercial teams.

• Implementing emergency preparedness early, not as a late-stage add-on, and ensuring that this is included within communication strategies.

Conclusion

Hydrogen offers enormous potential to transform the energy landscape, but its success depends on more than technological innovation. It requires a proactive approach to risk and resilience. Organisations must recognise that hydrogen introduces unique hazards, immature supply chains, and evolving regulatory frameworks that cannot be managed with traditional methods alone. By embedding hydrogen-specific competence, investing in robust continuity planning, and fostering collaboration across technical and commercial teams, businesses can mitigate uncertainty and build confidence in their operations. Those who act early to integrate resilience into strategy will not only reduce exposure to disruption but also position themselves as leaders in a sector poised to play a critical role in achieving global decarbonisation goals.