Building A New Energy Sector - Hydrogen Policy Statement Published

21st December 2020

The hydrogen sector will receive £100 million over the next five years to support a green recovery and Scotland's just transition to net zero.

Scotland is set to become a leading hydrogen nation, with an ambition to generate 5GW of renewable and low-carbon hydrogen by 2030 - enough to power the equivalent of 1.8 million homes.

Economic impact research suggests the industry has the potential to be worth up to £25 billion a year to the Scottish economy by 2045.

Scotland's Energy Minister Paul Wheelhouse said:"We are the first country in the UK to publish a Hydrogen Policy Statement that sets out how we can make the most of Scotland's massive potential in this new sector. Hydrogen is rapidly emerging across the international community as a sustainable solution for the decarbonisation of the economy and a key element of the energy transition picture. Scotland is prepared to play its full part together with other European nations - that's why we're publishing this key policy statement today and investing £100 million of Scottish Government resources to stimulate the sector and its supply chain.

"Scotland has, in abundance, all the raw ingredients necessary for the production of low-cost hydrogen as well as one of the largest concentrations of offshore engineering expertise in the world that can harness Scotland's renewable energy potential in technologies like wind, wave and tidal power, to produce green hydrogen. Indeed, Scotland is one of the best placed nations anywhere in the world to develop competitively priced hydrogen for our own economy's needs and to generate a surplus in supply to export to other European nations with emerging demand, but insufficient supply to meet their own needs.

"No one fuel or technology is, by itself, the solution to climate change, but hydrogen has the potential to be a very important part of a progressive, decarbonised energy system supporting our transition to net zero in transport, heating and industrial decarbonisation. We are committed to supporting this emerging sector to deliver a transformation in how we produce, store and utilise energy and to maximising the economic benefits that the production of hydrogen can bring."

Chief Executive of the Scottish Hydrogen and Fuel Cell Association Nigel Holmes said:"We welcome this Hydrogen Policy statement which underlines the opportunity for Scotland to be the leading hydrogen nation, and puts us on the right path to deliver net zero by 2045. This ambition builds on the experience and lessons learned with projects in Aberdeen, Fife, Orkney, and the Western Isles. Islands and ports will be hubs for energy innovation, bringing together large scale renewables for green hydrogen production.

"The identified capacity of 25GW of electrolysis by 2045 will produce 126TWh per year of green hydrogen across Scotland, with 32TWh to deliver Scotland's net zero target and 94TWh of green hydrogen for export."

Hydrogen - which emits no carbon dioxide - can be used as an alternative to natural gas to transfer and store energy and could replace fossil fuels in industrial processes, internal combustion engines and homes.

£100 million of the £180 million Emerging Energy Technologies Fund announced as part of the Scottish Government's Climate Change update will be invested in the Hydrogen sector.

Hydrogen Policy Statement is published with accompanying research:

We set out our vision for Scotland to become a leading hydrogen nation in the production of reliable, competitive, sustainable hydrogen, securing Scotland's future as a centre of international excellence as we establish the innovation, skills and and supply chain to underpin our energy transition.

Published: 21 Dec 2020

Scottish Government Hydrogen Policy Statement

It is becoming increasingly clear that hydrogen will play a major role globally in the transition to net zero, and Scotland’s assets, natural, human and physical mean we can be a major player in this emerging global hydrogen market.

Combinations of demand reduction, energy efficiency and increasing uptake of electrification can take Scotland a good deal of the way towards our net zero future and the decarbonisation of our whole energy system. But reducing our demand for energy and electrification alone, are unlikely to be enough. We believe that producing clean hydrogen and showing that it can be used to meet challenging energy demands (e.g. for heat, transport and industry) will also be part of the next stage of the Scotland energy transition pathway. During 2020 we have carried out a hydrogen assessment and a range of other analysis to deepen the evidence base in order to inform our policies on hydrogen going forward. From our assessment, it is clear that hydrogen is not just an energy and emissions reduction opportunity; it could also have an important role in generating new economic opportunities in Scotland. The Hydrogen Policy Statement articulates high level Scottish Government policy positions that are supportive of hydrogen development and deployment in Scotland. It commits to making hydrogen a key element of Scotland’s decarbonisation plans, setting out the potential roles for hydrogen in our energy transition and the ambitions and strategic priorities of Scottish Ministers regarding the various applications of hydrogen in our energy system in light of our net zero commitments.

The Hydrogen Policy Statement will provide the framework for the development of a Hydrogen Action Plan in 2021 which will provide further details on the planned approach and necessary actions to implement the policy positions outlined in the Policy Statement. The Hydrogen Policy Statement is published with an accompanying suite of research:

o The Scottish Hydrogen Assessment Report o Scottish Offshore Wind to Green Hydrogen Opportunity Assessment o Deep Decarbonisation Pathways for Scottish Industries Study

View in full - Scottish Government Hydrogen Policy Statement - 53 pages