Scotland looks to become “major player” in global hydrogen market


The Scottish government has set out its vision for Scotland to become a leading “Hydrogen Nation” in the production of reliable, competitive, sustainable hydrogen.

On 21 December, it published its Hydrogen Policy Statement, where it confirmed hydrogen as a key element of Scotland’s decarbonisation plans, noting it had become increasingly clear that hydrogen will play a substantial part in the global shift to net zero. It also presents an economic opportunity, and considering Scotland’s natural, human and physical assets, it is well placed to become a “major player” in the emerging global market.

An accompanying Scottish Hydrogen Assessment suggested a Scottish hydrogen economy could be worth up to £25bn and support over 300,000 jobs by 2045 under the most ambitious scenario, where Scotland exports (94TWh) green hydrogen to Europe.

The Scottish government is therefore committed to supporting the strategic growth of a strong Scottish hydrogen economy as Scotland targets net zero by 2045. It will work to provide a supportive policy and regulatory environment to support hydrogen production and use, enabling Scotland to take a pioneering role in the growing global hydrogen industry. This will begin over the 2020s – devoted to demonstration, accelerating market demand and putting policy framework in place – with the Scottish government highlighting the importance of establishing low carbon hydrogen production at scale by the middle of the decade, linked to carbon capture and storage (CCS).

By 2030, the ambition is to have developed at least 5GW of renewable and low carbon hydrogen production capability, with the 2030s dedicated to production at scale. This will grow to least 25GW of renewable and low carbon hydrogen production capability by 2045, with the focus then on scaling up and global expansion, allowing production of the lowest cost green hydrogen for domestic use and export.

The Scottish government will commit £100mn in funding to development of a Scottish hydrogen economy over the next five years, with this implemented through its Hydrogen Action Plan – set for publication in early 2021. It is also committed to driving technological progress and advancing innovation through unlocking public and private funds for innovation development; supporting demonstration for key hydrogen technologies, such as fuel cells and electrolysers; and supporting the demonstration and deployment of hydrogen and its emerging role in the sustainable decarbonisation of key industry functions and processes, as well as in transport and heat in buildings.

Despite this, the Scottish government acknowledged that it cannot achieve its hydrogen ambitions alone and stressed the need to work with the UK government, with many of the regulatory and legislative levers required determined at a UK level. The Scottish government pledged to collaborate on the development of a UK policy and regulatory framework for hydrogen, business models, market mechanisms, carbon pricing, feed in tariffs, fuel economy standards, renewable fuel standards and zero emission vehicle mandates – all considered key to raising market certainty and investor confidence.