The Scottish Government set out its eagerly awaited Hydrogen Policy Statement

On 21 December 2020, the Scottish Government set out its eagerly awaited Hydrogen Policy Statement. It also committed to setting aside £100m of resource for the hydrogen sector over the next five years. This will provide significant backing for a green recovery following the economic impact of the Covid-19 pandemic and help drive Scotland’s transition to net zero by 2045.

It is suggested that the industry has the potential to be worth up to £25bn per year to the Scottish economy by 2045 and will set Scotland on the path to becoming a leading hydrogen nation with the ambition of generating 5GW of renewable and low-carbon hydrogen by 2030. That is enough to power the equivalent of 1.8 million homes. Scotland is considered to be one of the best placed countries in the world to develop competitively priced hydrogen for its own needs but also to generate surplus for export to European markets and potentially beyond.

Scotland becomes the first of the UK nations to set out a specific hydrogen strategy, with Westminster expected to follow suit next year. Key aspects of the Scottish policy statement include:

• confirmation of Scottish government support for the strategic growth of a strong hydrogen economy focusing efforts on developing hydrogen production capability 
• committing £100m of funding over the next 5 years
• confirming the importance of establishing low-carbon hydrogen production at scale by the mid-2020s
• commitment to drive technological advancement and innovation by unlocking public and private funding 
• recognition of the need for pace
• a commitment to seek international collaboration
• a commitment to working with the UK Government to develop a UK-wide hydrogen strategy

Scotland’s Energy Minister, Paul Wheelhouse, commented:

“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 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”.

Whilst the industry is still in relative infancy, it is recognised that hydrogen has enormous potential. Aberdeen City Council has for example given the green light for a new city hydrogen hub, utilising nearby offshore wind assets as the source of green hydrogen production. The city is already a world leader with its plans for hydrogen powered public transport in the form of its newly acquired hydrogen fuel cell buses. In another world first, Scottish Gas Networks is developing a network in Methil, Fife which will bring 100% renewable hydrogen into homes in 2022, providing zero carbon fuel for domestic use.

Steven Dick, Partner, comments:

“There is no doubt that Scotland harbours the potential to lead the line in realising hydrogen fuel as an essential component of the energy mix in years to come. The Scottish government’s commitment to making this a reality is obviously very welcome from both an environmental and economic perspective. The policy should be kept under constant review and support genuine collaboration between government and the sector if it is to achieve its aim.”

The Scottish government will publish its Hydrogen Action Plan in 2021 which will set out the actions it will take to implement its hydrogen policies.