As set out in the government’s Scottish Government Hydrogen Policy Statement published today the country’s hydrogen sector will receive £100m over the next five years to support Scotland’s transition to net-zero.

As hydrogen does not emit carbon dioxide, it 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.

Scotland’s goal is to become a leading hydrogen nation, with plans to generate 5GW of renewable and low-carbon hydrogen by 2030, enough to power the equivalent of 1.8 million houses.

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 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.”

Scotland is estimated as one of the most suitable nations to develop competitively priced hydrogen for its economy’s needs as the Scottish waters contribute with some of the best offshore wind resources in the world, and can support the continuing growth and expansion of this sector.

“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,” Wheelhouse added.

The £100m investment is part of the full £180 million Emerging Energy Technologies Fund announced as part of the Scottish Government’s climate change update announced on 16 December.

High hopes for the future of the Scottish hydrogen industry

The Scottish government has said that according to its economic impact research, the industry has the potential to be worth up to £25bn a year to the economy by 2045, elevating the country’s capability to reach net-zero by 2050.

Scottish Hydrogen and Fuel Cell Association chief executive Nigel Holmes said: “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.

“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.”

While the prognoses for hydrogens’ future are bright, the country should also ensure appropriate improvements of manufacturing, storage, and education processes related to hydrogen in order to fully capitalise on the opportunity.

Renewables division manager of energy consultancy Xodus Group, Scott Hamilton, said: “A decade of serious action is now required to realise the full potential and strategic investment in hydrogen transportation and storage will be essential to unlock the economic opportunity for Scotland.

“The supply chain is well-positioned to support green hydrogen development, however gaps in the areas of design, manufacture, and maintenance of hydrogen production, storage and transportation systems will need to be addressed.”