The Hydrogen Policy Statement was published in December 2020. Within it, the Scottish Government confirmed our strong support for a strategic approach to the development of the hydrogen economy in Scotland and set a clear ambition of 5GW installed hydrogen production capacity by 2030 and 25GW by 2045. The draft Hydrogen Action Plan is a companion document to the Policy Statement and should be read alongside it.
In this draft Hydrogen Action Plan we set out the necessary actions over the next five years to implement the key policy positions and ambitions set out in our Hydrogen Policy Statement. These actions will help put us on the pathway to becoming a leading nation by 2045 in the production of reliable, competitive, sustainable hydrogen and provide the potential to secure Scotland's future as a centre of international excellence as we establish the innovation, skills and supply chain that will underpin our energy transition.
Scotland's demonstration of hydrogen production and use over the past few years has cemented our reputation as a nation that can foster emerging sectors and get things done. We are determined to build on this reputation, work in partnership with others to assemble our resources, and focus on the actions that will enable and support the emerging hydrogen sector in Scotland to grow, to move beyond the demonstration phase and to maximise opportunities at commercial scale. To help us achieve this we have committed £100 million of funding towards the development of our hydrogen economy over the next five years.
Hydrogen has a role to play across Scotland in our islands and rural communities, cities and industrial clusters, and strategies for its production and application are expected to vary across these geographic regions. We are committed to realising the benefits of hydrogen to our regions and local communities and so will support regional hubs of hydrogen activity across Scotland, recognising the differing resources, strengths and focuses of each location.
Scotland's businesses are well positioned to help support the emerging hydrogen economy. Established sectors such as oil and gas, subsea, maritime, onshore and offshore renewables, chemicals and petrochemicals and aerospace contain a wealth of skills and capacity, and hydrogen represents an attractive diversification opportunity for those sectors as the nation continues its energy transition. The developing hydrogen economy will require a strong domestic supply chain across the whole hydrogen value chain, including engineering, manufacturing, consultancy, and design. We know that Scottish companies are already engaged or actively interested in moving into this area but we are aware that the hydrogen industry is not a fully established sector as yet and we will support this early development through a hydrogen supply chain development plan and mobilising investment along supply chains.
We are keen to play our role in the development of hydrogen in the UK, European and international markets. Scotland is well placed in terms of proximity and infrastructure connectivity to key locations in Northern Europe that are unlikely to be able to produce enough renewable hydrogen to meet their own decarbonisation requirements and currently developing import strategies. Scotland has the potential to produce significant quantities of renewable hydrogen from our offshore and onshore wind resources and our potential wave and tidal power which is vastly greater than our indigenous demand. We also have the potential to produce low-carbon hydrogen at a large industrial scale.
Scotland's access to low-cost renewables, supplies of natural gas, carbon storage, utilisation of existing distribution infrastructure, proximity to demand, and our innovation support landscape can all contribute to greater efficiencies and thus reducing the cost base. Combined, these position Scotland to produce and then export the lowest-cost renewable and low-carbon hydrogen in Europe. However, our plans to accelerate the hydrogen economy in Scotland will not happen on their own and we will need to work with industry and with the UK Government to apply both devolved and reserved powers in alignment, to support the hydrogen economy.
Scotland has the opportunity and capability to benefit from a just transition away from fossil fuels and to marshal the existing energy sector skills and company base to produce large volumes of renewable and low-carbon hydrogen. This transition will not only help reduce Scotland's emissions, and support meeting Scotland's challenging greenhouse gas emissions targets, but will also allow Scotland to develop a role as an exporter of hydrogen to other partner nations and to create and protect jobs and generate significant economic opportunities for communities across Scotland.
We have the resources, the assets, the people and the ambition to achieve this.
Michael Matheson MSP
Cabinet Secretary for Net Zero, Energy and Transport
"Scotland has the opportunity to become a leading hydrogen nation in the production of reliable, competitive, sustainable hydrogen."