The committee said hydrogen is "not a panacea" for reaching the emissions reductions goal by 2050, but can grow to become "a big niche" fuel in particular sectors and applications, for example, where electrification is not possible, and as a means of storing energy.
As a result, MPs have urged the government to give industries more clarity over how and when it will make decisions about the role of hydrogen in the UK economy.
The committee found hydrogen is not likely to be practically and economically viable for mass use in the short and medium term for heating homes or fuelling passenger cars due to the significant cost, technological and infrastructure challenges associated.
However, the areas where the use of hydrogen has "strong" potential include in parts of transport such as areas of the rail network which are hard to electrify, bus networks which have a local pattern of operations susceptible to refuelling at depots, and some parts of shipping and aviation.
Committee chair Greg Clark said: "There are significant infrastructure challenges associated with converting our energy networks to use hydrogen and uncertainty about when low-carbon hydrogen can be produced at scale at an economical cost."
It comes after Virgin Atlantic was earlier this month given the contract do the first SAF flight. The fuel will be able to partially power some of the carrier’s flights across the west coast of the US.
The deal will see Virgin purchase 10 million US gallons of sustainable aviation fuel (SAF) a year for seven years via its minority shareholder Delta.
The British Airline Pilots’ Association (Balpa) welcomed the government’s investment in the world’s first net zero flight, describing the decision as a "good milestone" on the flight path to aviation sustainability.
General secretary Martin Chalk said: "Research so far shows that tackling persistent contrails could quickly and easily help the sector reduce its negative impact on radiative forcing and Balpa is keen to see investment and research in this area."
