The Scottish Government Hydrogen Action Plan

United KingdomScotland

Hydrogen Action Plan

The plan (published on 12 December 2022) was created in light of the Scottish Government’s vision for Scotland to become a leading hydrogen nation. Recognising the opportunity open to Scotland to harness its potential in the hydrogen sector, the plan sets out the actions that will be taken over the next five years to support the development of a hydrogen economy.

It addresses the key role that both the offshore and onshore wind industries could play in supporting and facilitating the development of hydrogen projects in Scotland. It also sets out how the steps taken in the plan will contribute towards a just transition to net zero. The plan explores the export opportunities which would become open to Scotland with the development of a hydrogen economy and considers Scotland’s potential in this industry in the decades ahead.

Building a hydrogen sector

Whilst also highlighting its progress to date in developing this sector, the Scottish Government commits to numerous further actions, including:

  • Investing in early projects in order to help promote industry knowledge and foster cooperation between the public sector and private sector.
  • Encouraging Scotland’s academic efforts and research through networks such as the Scottish Hydrogen Innovation Network (SHINE), which support close collaboration between academia, industry and governments.
  • Instituting supportive policy with positive socio-economic effects which lead to the development of a strong skills base, allowing Scotland’s hydrogen market to develop early with access to a skilled workforce.

Regional hydrogen energy hubs (geographic locations which play host to the entire hydrogen value chain from production, storage and distribution to end-use) are central to the plan. The plan identifies 13 locations across Scotland where hubs could be created to take advantage of regional strengths, existing industry or demand.

Hydrogen Uses

The Scottish Government sees hydrogen as a key element in decarbonisation, alongside electrification. The plan sets out a hierarchy of uses, with refineries and fertiliser production plants identified as significant market opportunities whilst also recognising the remote nature of businesses such as distilleries, which mean hydrogen is a potential option where the grid is a limiting factor. At the other end of the hierarchy, hydrogen is not considered as likely to play a significant role in decarbonisation of domestic heating.

Exports

The Scottish Hydrogen Assessment, completed in 2020, estimated that by 2045 “approximately 3.3 Mt (126 TWh) of renewable hydrogen could be produced in Scotland with approximately 2.5 Mt (94 TWh) exported to the UK and other European markets annually”.

The plan identifies the opportunities for Scottish business beyond hydrogen products, in terms of trade in goods and services in the hydrogen supply chain, which could support up to 300,000 jobs by 2045. The plan also stresses Scotland’s natural advantages, such as proximity to centres of demand and established infrastructure and sets out the government’s intention to develop a Hydrogen Sector Export Plan which will be published in 2023. This plan will outline how the government will use its trade and investment levers to support the development of an international market for Scotland’s hydrogen sector. In addition, it commits to several additional actions under the Hydrogen Action Plan, including:

  • Utilising its international network to gather crucial market intelligence and knowledge of regulatory barriers.
  • Engaging with the sector, including through the establishment of an export-focused industry-government forum, allowing the government to gather industry feedback relating to exports.
  • Researching and analysing how best to exploit Scotland’s international competitive advantage in the industry, what it’s priority export markets should be and what market access barriers exist.

Ambitions for the future

The Scottish Government aspires to 5GW of hydrogen production capacity in Scotland by 2030 and 25GW by 2045. The majority of the 5GW by 2030 is expected to come from renewables. The Scottish Government will not support new hydrogen production where CO2 is unabated. The plan specifically states that there is no expectation of additional grey hydrogen production.

Scotland’s economic development agencies, Highlands & Islands Enterprise, South of Scotland Enterprise and Scottish Enterprise are pivotal to the achievement of the Scottish Government’s ambition which can be summarised as:

  • scaling up hydrogen production in Scotland
  • facilitating the development of a domestic market
  • maximising the benefits of integrating hydrogen into our energy system
  • enabling the growth and transition of Scotland’s supply chain and workforce
  • establishing and strengthening international partnerships and markets and
  • strengthening research and innovation