Draft Hydrogen Action Plan

The Hydrogen Accelerator welcomes the Scottish Government’s Hydrogen Action Plan to underpin Scotland’s ambitions to be not only an early adopter but a world leader within the sector. The Hydrogen Accelerator was established following the Scottish Government’s Programme for Government commitment in 2019 and is assisting in the co-ordination of hydrogen initiatives across Scotland.

It is positive to note within the Action Plan that hydrogen’s dynamic uses have been illustrated – as a transport fuel, for energy storage, for decarbonising heavy industries and for domestic heating.

It is also positive to note also that both blue and green hydrogen are detailed within the plan, however, it would be useful to see green hydrogen coming more to the fore to acknowledge Scotland’s wealth of on and offshore wind developments which are key for building Scotland’s hydrogen economy and export potential. Blue hydrogen may play an important role in large-scale production, in particular if heating by injecting hydrogen into the gas network is chosen. Whilst blue hydrogen offers a very significant possibility to produce large amounts of low carbon hydrogen, it must be delivered with rigorous carbon capture from the outset if Net Zero perspective is to be retained. As for Green Hydrogen this will take time and investment to deliver at scale. The ultimate goal for Scotland should be large scale production of green hydrogen, with blue hydrogen a key extender. We believe that Scottish government funding should primarily be directed toward green hydrogen. Continued dialogue with the UK government to invest equally in blue hydrogen production in Scotland as the rest of the UK would be welcome.

With regard to the pace of hydrogen development within Scotland, we are satisfied that the aims set out as part of the Hydrogen Economy route map are realistic and attainable by 2030 and 2045 respectively. To achieve this, it is critical that a concerted effort is made by industry, academia and governance to abide by the milestones set out. It is the Hydrogen Accelerator’s opinion that blue hydrogen can act as a key enabler to kick start the hydrogen economy, and build scale, whilst the magnitude of the green hydrogen industry continues to grow, with appropriate support, towards displacement of blue by 2045.

The themes are well chosen and appropriate but the level of funding considered seems small in relation to the size of the challenge.

With the limited funding it is much better to target selectively where most value can be obtained

The key questions around safety and public acceptance potentially merit a theme of their own. If hydrogen is to position itself as a viable alternative to existing fuels in the transport and domestic heating sector, the safety case for its use must be equally strong as that for the hydrocarbon systems it will aim to displace. The Action Plan as a whole is very broad but the development of strict, defined safety legislation and regulation is an area where government leadership would be welcome with the private sector supporting government initiatives.

Enable income assisted citizens to utilise hydrogen in modified boilers where district heating is impractical or too expensive to deploy widely ensuring affordable zero carbon heating for all Scottish citizens.

Accelerate the uptake of clean, green modes of public transport, e.g. fuel cell electric buses, trains and ferries. Discourage the use of private passenger cars in urban areas, whilst simultaneously developing a fit-for-purpose public transport system allowing a modal shift to affordable, green public transport.

Circular economy - not only is this at the heart of the Scottish Government’s Climate Emergency plans but also provides the opportunity to avoid stranding assets that have incurred significant investment or embedded carbon footprint e.g. by converting commercial vehicles where possible to hydrogen fuel cell electric. The feasibility of reusing such assets has been successfully demonstrated as part of the Zero Emissions Train project, as exhibited during COP26 at Bo’ness and Kinneil Heritage Railways where both a Refuse Collection Vehicle and a passenger train had been converted to run on hydrogen

Protect the wealth of expertise and skills in sectors such as Oil and Gas. Encourage their transition to other sectors such as hydrogen, enabling the sector to rapidly grow. Redirecting towards hydrogen, the Health and Safety strengths and best practices from the oil and gas industry as well as the depth of knowledge around offshore development, production and distribution could provide a route for a swift transition and rapid upskilling of Scotland’s hydrogen workforce, without significant loss of jobs.

Supply chain development, support for SME’s, attract inward investment to ramp up innovative hydrogen technologies.

Health and wellbeing of citizens is critical to the Scottish economy in terms of reducing the huge impact on the NHS and on employers.

Upskilling will be required across sectors to ensure safe utilisation of hydrogen technologies, e.g. the training of emergency services.

Focus should be on de-risking green hydrogen projects which aim at reducing the cost of hydrogen cost by providing economies of scale so that larger private sector investment can be made with appropriate risk levels. For example, the development of large-scale green hydrogen production at Whitelee windfarm attracted significant investment from Scottish Power and ITM Power.

Extension of the UK Emissions Trading Scheme (ETS) within Scotland to cover the transport sector (heavy-goods freight as a minimum) would accelerate the transition to a hydrogen powered road freight sector, spurring transition in other sectors reliant on heavy duty vehicles, such as forestry, agriculture, and possibly marine. The UK ETS is structured in a similar manner to the EU ETS, which since introduction in 2005 has yielded 42.8% cuts in emissions in the main sectors covered by the scheme. Given the lack of suitable alternatives, other than hydrogen, to diesel power in HGVs, it is reasonable to assume significant reduction in the cost of hydrogen could be achieved as utilisation of hydrogen refuelling stations increases.

Adjust eligibility so that a smaller number of large projects (<10) are tilted in favour of happening so that the money is used to unlock significantly more than £100M in total spend. It is likely that this implies contribution from EETF is <50% of total spend, perhaps only 20%. Additionally, a requirement to have a certain fraction private sector funding would help ensure a shift towards increasing commercial viability

Strongly prioritise projects that are mostly or exclusively based on green hydrogen to ensure that blue hydrogen accelerates rather than hinders green hydrogen deployment and to ensure Scotland remains on track to become a green hydrogen exporter

Work which enables efficient transportation of hydrogen allowing hydrogen to become a long-range tradeable commodity. This includes R&D in power-to-X, green ammonia and other liquid (or solid) hydrogen carriers.

Prioritise technology to improve efficiency over capital cost reduction, as the main driver for cost reduction will be growth in manufacturing volume. Local availability of renewable resources will be a limiting factor on hydrogen expansion for some time to come so increasing the delivery of hydrogen from finite resources will benefit both fuel cost and extent of deployment

Technologies that are developing rapidly should be prioritised. In electrolysis this would favour SOEC and alkali polymer membrane. Both are areas where the UK has capability and Scotland has resources that could help attract investment.

If we are to avoid importing technology to deliver the hydrogen economy, we must support the innovation chain especially at the early stages. This involves both creating new University positions to nucleate and grow capability and to deliver the full skills agenda especially at College level.

See answer 5: prioritise projects with heavy industrial involvement, whereby government funding is used to get projects over the line, even though it may only be a small proportion of the overall project spend.

Consider regulatory frameworks that place a floor on fossil fuel prices so they do not reflect the dips in the cost of crude oil and natural gas, thus preventing the creation of short term incentives that delay transitioning to hydrogen.