Hydrogen action plan: draft

Part 2 – Actions to Meet our Vision, Ambition, and Commitment

To ensure Scotland is in the best possible position to achieve our ambition of 5GW of hydrogen capacity by 2030, over the next five years we will focus on the implementation of short-term actions to support meeting the following six key challenges:

• Scaling up hydrogen production in Scotland
• Facilitating the development of a domestic market
• Maximising the benefits of integrating hydrogen into our energy system
• Enabling the growth and transition of Scotland's supply chain and workforce
• Establishing and strengthening international partnerships and markets
• Strengthening innovation and research

As the hydrogen market develops so too will our policy and actions. The actions set out in this draft Action Plan are not exhaustive and we would welcome views on them. In order to maximise the decarbonisation and economic benefit for businesses and communities from the establishment of a hydrogen economy we will utilise our industry-government forums to ensure Scottish Government policy and action remains responsive to technological and market developments over the next five years.

Action themes and key actions

1. Scaling up hydrogen production in Scotland

Scotland's vast onshore and offshore wind capacity means it has the potential to produce sustainable, low-cost renewable hydrogen at scale. To realise our 5GW by 2030 and 25GW by 2045 ambitions, action must be taken in the immediate term to support and accelerate the developing pipeline of Scottish renewable and low-carbon hydrogen projects and to eliminate any potential barriers such as regulatory, planning or infrastructure constraints.

1. Launch our £100m renewable hydrogen development fund (EETF) to support hydrogen pathfinder projects in the next five years.

A call for proposals for renewable hydrogen projects and infrastructure will be launched in Q1 2022. More detail on what the £100m hydrogen development programme will support is found in section 3.

Timeframe: 2021-26

2. Ensure the regulatory, planning and consenting framework for renewable energy and hydrogen developments supports the scale-up of hydrogen production at pace.

We will undertake a review of existing legislation, regulation and standards to assess how the current legislative framework supports hydrogen development in Scotland, and, where necessary, will take action, where it is within devolved competence, to ensure a co-ordinated approach and address any gaps or issues.

Timeframe: 2022-23

We will work to ensure, where appropriate, any consenting framework for hydrogen production works in tandem with existing consenting frameworks for renewable electricity, in order to maximise opportunities for development on key sites such as wind farms, and make efficient use of constrained renewable generation.

Timeframe: 2021-26

We will ensure the marine planning processes support the delivery of hydrogen electrolysis at sea.

Timeframe: 2021-26

We will publish planning consent guidance on the development of large-scale hydrogen production facilities in Scotland and its waters.

Timeframe: 2022

3. Ensure our ambitions for onshore and offshore wind development in Scotland support our 5GW by 2030 hydrogen ambition.

We will work with the electricity system operators to determine how best to accelerate hydrogen from constrained wind and address curtailment payments. Views are welcome on the consultation on the draft Onshore Wind Policy Statement which launched on 28 October 2021.

Timeframe: Ongoing

We will deliver a planning round for Innovation and Targeted Oil and Gas decarbonisation (INTOG) with the specific purpose of constructing offshore wind farms to decarbonise oil and gas infrastructure operations, maximising further opportunities for the Scottish economy through the hydrogen supply chain and uses.

Accelerate delivery of future offshore wind plans and leasing rounds through the development of a clear roadmap for future offshore wind leasing in Scotland.

Timeframe: 2025-26

We will also develop the data to allow us to monitor and report on progress towards our 5GW hydrogen ambition on an annual basis

Timeframe: Ongoing

4. We will build on our evidence base to understand the extent of the role renewable hydrogen is likely to play in a domestic and global market.

The first part of this work is underway and will establish an expected cost-trajectory for renewable hydrogen produced in Scotland to 2030 and 2045. This will help develop our understanding of hydrogen demand, potential hierarchy of use and future devolved policy decisions.

Timeframe: Ongoing

5. Support spatial planning in enabling the establishment of hydrogen projects.

Align our National Planning Framework with our hydrogen policy and Hydrogen Action Plan

Timeframe: 2021

6. Support the Scottish Cluster to deliver on its ambition to produce low-carbon hydrogen at scale.

We will continue to support the Scottish Cluster which will enable carbon capture deployment across a diverse set of emitters and a robust and resilient multi-option transport and storage system. The Scottish Cluster is required to enable low- and ultimately negative-carbon hydrogen production in Scotland. £80m from the £180m Emerging Energy Technologies Fund has been identified to support the development of CCUS and CCS-enabled negative emissions technologies in Scotland.

Timeframe: Ongoing

7. Ensure low-carbon hydrogen produced and used in Scotland is compatible with our climate ambitions.

We will continue to work with the UK Government in the development of a UK Hydrogen Standard which will use methodology for calculating greenhouse gas (GHG) emissions associated with low-carbon hydrogen production and will set maximum acceptable levels of GHG emissions associated with low-carbon hydrogen production.

In the interim, Scottish grant funding for low-carbon hydrogen projects will be conditional on capture rates of at least between 90-95%.

Timeframe: 2021-22

8. We will not support new hydrogen production where CO₂ is unabated.

We will set eligibility criteria for Scottish Government funding support for the development of new industrial plants for the primary purpose of hydrogen production in Scotland which will require the demonstration of compliance with the UK low-carbon hydrogen standard on its introduction.

We will integrate the UK low-carbon hydrogen standard into our funding schemes and investment decisions. Ahead of the low-carbon hydrogen standard, Scottish Government funding will not be awarded to new industrial sites for the primary purpose of producing hydrogen where CO₂ is unabated.

We will confirm our commitment to encourage industry to transition away from production and use of unabated hydrogen as part of the forthcoming Energy Strategy Refresh.

Timeframe: 2021-22

9. We will ensure that hydrogen development in Scotland is planned where it can be best supported by available water resources.

Our Enterprise Agencies have commissioned work to develop detailed plans and analysis of site requirements for early renewable and low-carbon hydrogen production plants and hubs in Scotland providing a detailed set of future site requirements. This report will be concluded in Spring 2022.

Timeframe: 2022

We will work with Scottish Water and industry to understand and map how water resources and infrastructure are distributed within Scotland and water availability for hydrogen production as part of our wider GIS-mapping activities.

Timeframe: 2021-26

Case Study – Low-Carbon Hydrogen for Industrial Decarbonisation: INEOS

INEOS has announced its commitment to the Paris Agreement targets and to meet the Scottish Government's 2045 net zero target by outlining a £1bn investment to continue its decarbonisation of operations at its Grangemouth site.

INEOS Grangemouth's Net Zero Roadmap involves a move to the production and use of hydrogen by all businesses at the Grangemouth site accompanied by carbon capture and storage of at least one million tonnes per annum of CO₂ by 2030 and delivering emissions savings of more than 60% across the site by 2030.

This includes investment in a world-scale 700MW low-carbon hydrogen production plant, and associated plant optimisation, to reduce CO₂ emissions.

Switching to low-carbon hydrogen is the main route to decarbonise energy-intensive chemical and industrial clusters such as Grangemouth. It enables effective transition via integration with existing steam and power generation units.

Low-carbon hydrogen production will also initiate investment in the hydrogen networks which are vital for a robust hydrogen economy, and seed investment in other uses of hydrogen, such as for transport and heat.

The roadmap supports Scotland to transition to a net zero economy while securing high-value manufacturing jobs and attracting new investment – the essence of a just transition.

2. Facilitating the development of a domestic market

To establish a strong hydrogen economy in Scotland that can support the growing global market, a strong, sustainable domestic market must also be established. Focus will be placed on driving technological progress and economies of scale to reduce the cost of hydrogen and ensure it is an economically viable option for sectors such as transport, industry, heat.

The Scottish Hydrogen Assessment indicates that the transport sector, alongside industry, will most likely form the initial areas of high demand for hydrogen in Scotland.

Economies of Scale

10. We will support the development of appropriate Regional Hydrogen Hubs where production is coupled with multiple end-use applications thus helping to stimulate demand.

The Emerging Energy Technologies Fund (EETF) will will provide strategic support to developing regional hydrogen hubs that combine production, storage and distribution with multiple end-use applications. This sector coupling approach will help to aggregate demand and improve the economic benefit of the projects.

Timeframe: 2021-26

We will provide over £15m from the Energy Transition Fund to support the establishment of the Aberdeen Hydrogen Hub.

Timeframe: 2020-24

Industry

11. We will support Scottish industries to use hydrogen in their decarbonisation plans.

We will invite energy-intensive manufacturers to apply for match-funded grants via the Scottish Industrial Energy Transformation Fund (SIETF) to support the deployment of, or studies into, energy efficiency or deeper decarbonisation projects such as fuel switching to renewable or low-carbon hydrogen.

Timeframe: 2021-25

We will facilitate a number of non-revenue generating 'Net Zero Transition Manager' roles, embedded within high-emitting manufacturing sites, to identify and progress decarbonisation opportunities, including low-carbon hydrogen, to contribute to the long-term sustainability of industrial businesses.

Timeframe: 2022

We will take action on the recommendations of the Scottish Net Zero Roadmap.

Timeframe: 2023

Through the work of the Grangemouth Future Industry Board we will focus efforts to support the development of the hydrogen economy at Grangemouth. We will work to map a range of local interests in hydrogen, with a view to understand the best ways to support the development of hydrogen applications, including industrial use, in Scotland's major industrial region.

Timeframe: 2021

12. No support for new unabated hydrogen production.

We will no longer support via Scottish Government funding schemes the development of new, industrial development where carbon emissions are unabated. Such development will require to demonstrate the implementation of a decarbonisation strategy at point of operation e.g. fuel switching, carbon capture, and energy efficiency. This includes new industrial sites for the primary purpose of producing hydrogen where CO₂ is unabated.

Timeframe: 2021

Transport

13. Mission and Partnership

We will create an environment for the public and private sector to co-design technology and infrastructure pathways for the application of hydrogen in transport, and deliver coincident benefits for jobs and supply chains.

We will establish a consortium for hydrogen in Scottish transport to shape and support delivery of the Hydrogen Action Plan in the transport sector.

Timeframe: Summer 2022

14. Infrastructure

We will co-design with industry and publish a framework for enabling infrastructure to underpin Scotland's move to a zero emission transport system, including hydrogen and electricity as complementary fuels, both essential to the decarbonisation of transport.

We will produce forecasts for hydrogen and electricity demand across all transport modes – from cars through HGVs and trains to ships and planes – across all parts of Scotland. We will engage with businesses and industry on these forecasts in tandem with the Energy Strategy refresh.

Timeframe: Summer 2022

Working with the consortium for hydrogen in Scottish transport, we will co-design a framework for and establishing a network of hydrogen multi-modal refuelling stations to support the adoption of hydrogen vehicles across all appropriate modes of transport.

Timeframe: 2022-23

We will join the multi-national effort to standardise hydrogen road refuelling stations in Europe. [See Action 36.]

Timeframe: Spring 2022

15. Vehicles

We will work collaboratively with the transport sector to drive down the cost of hydrogen in transport applications and encourage uptake of both hydrogen and battery-electric vehicles.

In partnership with the consortium for hydrogen in Scottish transport, we will explore detailed options for driving down the cost of hydrogen in transport applications, and consider how best to enable further hydrogen vehicle projects. This work will build on learning from existing Scottish rail and bus projects to support the piloting and demonstration of hydrogen propulsion across a range of transport modes.

Timeframe: 2022-23

We will share lessons learned from existing support schemes, including on zero-emission buses, in order to support cost reduction and promote innovative business models.

Timeframe: Ongoing

While regulations on the Renewable Transport Fuel Obligation (RTFO) are reserved to the UK Government, the Scottish Government will review and develop our funding support for zero-emission vehicles to ensure that it is complementary to subsidy available for hydrogen production.

Timeframe: Ongoing

We will continue our work with public bodies on enhancing the role of fleet investments as enablers of technology deployment, including hydrogen.

Timeframe: Ongoing

We will work with the UK Government and approval and safety bodies on the development of a proportionate and supportive system of standards and regulation around wider issues which will affect the successful development of the emerging hydrogen vehicle and fuel cell industry.

Timeframe: Ongoing

16. Wider ecosystem

We will further develop Scotland's zero-emission mobility ecosystem, aiming to make Scotland a global centre of expertise for innovation in hydrogen mobility technologies, and growing our hydrogen mobility manufacturing base.

We will publish the findings of the Scotland's Automotive Industry Advisory Group's on enhancing Scotland as a destination for innovation and investment in the design and build of heavy and niche vehicles.

Timeframe: Winter 2021

Building on the findings of the IAG, we will continue to develop Scotland's ecosystem for innovation in hydrogen technology, particularly in heavy-duty vehicles, encompassing the LOCATE powertrain testing facility, the Michelin Scotland Innovation Parc, the Driving the Electric Revolution Scotland (DERS) Industrialisation Centre, and the Hydrogen Accelerator at the University of St Andrews.

Timeframe: Ongoing

We will continue to develop support to address barriers to the growth of a competitive transport hydrogen technology supply chain in Scotland. We will do this working with partners on initiatives such as the Sustainable Mobility Scotland Cluster Builder and the Low-Carbon Transport Expert Support scheme.

Timeframe: Ongoing

We will continue to support a growing Scottish skills base in hydrogen for transport. We wish to see further demonstration of hydrogen transport applications and will continue to support suitable projects coming forward.

We will continue to explore the skills gaps for hydrogen transport applications in delivering the Climate Emergency Skills Action Plan. We will do this collaboratively, in a Team Scotland approach bringing together Transport Scotland, Skills Development Scotland, alongside, for instance, the Energy Skills Partnership, the Hydrogen Accelerator, and Michelin Scotland Innovation Parc (MSIP) Skills Academy.

Timeframe: Ongoing

As part of this approach, we'll continue to work with the Energy Skills Partnership on the Transport Hydrogen Skills Development Project. Building on the findings of the 2021 Transport Scotland HDV Skills Baselining Report, this Project will:

• support improved Scottish capabilities in Scottish colleges to deliver hydrogen for transport training for both technicians and business leaders;
• deliver hydrogen for transport education material for upper primary and secondary school pupils as well as young adults.

Timeframe: By April 2022

17. We will continue to promote Scotland's expertise on hydrogen for mobility internationally and work with partners overseas on opportunities for collaboration on technical and policy issues.

We will work with the Transport Decarbonisation Alliance and the ZEV Community of the Under2 Coalition on the role of hydrogen in transport, including the delivery of commitments in the Global MoU on Medium and Heavy-Duty Vehicles and the RouteZero Pledge on Decarbonisation of Public Sector Fleets.

Timeframe: Ongoing

Heat

18. We will continue to work with SGN and National Grid Gas Transmission to provide evidence on the role gas decarbonisation can play in meeting our targets, and a timeline for resolving uncertainties.

We have invested £6.9m in the H100 Fife project and will continue to support the development of evidence on the potential role of hydrogen in decarbonising heat including the potential expansion phases of the H100 Fife project.

Timeframe: 2021-26

We will support initial action by SGN on their pathway to converting large segments of their network to 100% hydrogen, wherever those actions are commensurate with keeping options open and limiting consumer costs.

Timeframe: 2021-26

We will undertake a strategic review working with stakeholders, including network companies, local authority and delivery partners, to identify regions and areas most likely to have access to hydrogen in the future, and considered high-potential areas for the use of hydrogen for heat in Scotland

Timeframe: 2021-22

We will work with the Gas Network Operators and the UK Government to explore opportunities for increasing the blend of up to 20% hydrogen in the existing gas network.

We will identify ways to support projects which seek to demonstrate renewable hydrogen production and blending in the gas network.

Timeframe: Ongoing

19. We will continue to press the UK Government to take urgent action to facilitate decarbonisation of heat in buildings, in line with our Heat in Buildings Strategy.

Alongside other action in reserved areas to support delivery of our Heat in Buildings Strategy, we will urge the UK Government to expedite progress on amending regulations and legislation to support hydrogen blending, accelerate decisions on the role of 100% hydrogen in the gas grid and to enable our ambition to maximise volumes of renewable hydrogen in our energy system as quickly as possible.

Timeframe: Ongoing

We will continue to press the UK Government to progress the consultation on enabling and requiring hydrogen-ready boilers.

Timeframe: Ongoing

Case Study – Hydrogen Innovation: PlusZero

PlusZero is an innovative Scottish clean power start-up supporting the decarbonisation of the outdoor events sector with a renewable hydrogen-based clean power solution.

The outdoor events sector, is estimated to emit 1.2 million tonnes of CO₂ per annum in the UK.

PlusZero provides portable, zero-carbon hydrogen combustion engine generators fuelled by renewable hydrogen that can replace the carbon emitting and polluting diesel generators the sector currently relies on.

PlusZero sources the renewable hydrogen used to fuel its generator from its own and partner electrolyser facilities in the Western Isles and Orkney, creating new markets for Island renewable electricity producers.

PlusZero, supported by the Scottish Government and key technical expert partners Logan Energy, Abbott Risk Consulting and CMB.TECH, is demonstrating its hydrogen clean power solution with Edinburgh Festival event partners during Edinburgh's 2021 cultural events programme, including powering performances by artists at the Edinburgh International Festival's Contemporary Music venue in August 2021.

PlusZero's demonstration programme will culminate at Edinburgh's Hogmanay and will be followed by the launch of the company's commercial clean power service in 2022.

3. Maximising the benefits of integrating hydrogen into our energy system

The Hydrogen Policy Statement recognised that an integrated energy system, that includes hydrogen electrolysis, can allow better management of the supply and demand of energy. By allowing an increasing use of renewable electricity generation, renewable hydrogen production can play a critical role in supporting the realisation of Scotland's ambitions for 8-12GW onshore wind and 11GW offshore wind by 2030. Converting renewable power into hydrogen can provide developers with new routes to market, and may change the investment proposition for new and existing renewables generation. Collaborative action in the short term will explore the optimal integration of hydrogen technology into our energy system as an energy store and to provide flexibility, resilience and balancing to the wider energy system.

20. Work with electricity and gas network operators to realise system benefits of hydrogen.

In partnership with Scotland's electricity and gas network operators, we will identify the integration challenges and service opportunities which hydrogen production presents within our power and gas grid networks.

We will work with UK Government, Ofgem and the energy network sector to ensure that regulation and market structure support and reward hydrogen projects for the full range of benefits they deliver to the wider energy system.

Timeframe: 2021-26

We will continue to work with key stakeholders to evaluate the most advantageous locations for hydrogen electrolysis to reduce electricity constraints and deliver maximum value. A report from the first stage of this work will be published in Spring 2022.

Timeframe: Spring 2022

21. Explore the use of hydrogen as an energy storage and balancing asset to the national electricity grid and the national gas grid including the repurposing of existing national grid pipelines for hydrogen use, transportation and storage.

Reflecting the critical role that hydrogen can play as a low-carbon energy source providing flexibility, resilience and balancing to the wider energy system, we will develop a vision for the role of hydrogen storage as an integrated part of the hydrogen and wider energy systems.

Timeframe: 2021-26

22. Support the establishment of a Hydrogen Transportation and Distribution infrastructure to support our ambition to export hydrogen to the rest of the UK and Europe.

We will fund the Net Zero Technology Centre Transition Programme and the Hydrogen Backbone Link project which will position Scotland in a leading role for the development of pan-European hydrogen infrastructure including export capability. It will address the opportunity for Scotland and the rest of the UK to supply hydrogen to Europe as part of an extensive hydrogen transport and distribution system. The project will undertake concept studies and subsequent technology development for the re-purposing and optimisation of existing pipeline infrastructure both onshore and offshore.

Timeframe: 2021-24

4. Enabling the growth and transition of Scotland's supply chain and workforce

Scotland's existing oil and gas and energy supply chains can transfer many of the critical engineering and management skills important to establishing the stable and secure production of affordable large-scale hydrogen. We will take action to ensure at-risk sectors and regions benefit from a just transition to net zero by supporting the growth and transition of companies and workforce skills development that will underpin our future hydrogen economy.

Our Enterprise Agencies, Scottish Water, Transport Scotland, Scottish Development International and other areas of government and public bodies, including Marine Scotland and the Crown Estate Scotland, are working collaboratively to drive the hydrogen economy agenda forward and respond to opportunities as they arise.

Scottish Enterprise has adopted hydrogen as one of its seven National Programmes in order to provide a strong focus on identifying opportunity for economic benefit and assist our policy ambitions for this growing sector.

23. We will work with the Enterprise Agencies to build support for the Scottish Hydrogen Supply Chain through the development of a Hydrogen Economy Cluster.

In the delivery of this project, we will work closely with organisations like SHFCA, NECCUS and others, helping to build on the excellent services they offer. The Hydrogen Economy Cluster will raise awareness of the opportunities in the hydrogen economy, support a Team Scotland approach and provide practical steps to help companies realise opportunities in hydrogen and associated low-carbon markets. The cluster will be pan-Scotland and will play a key role in helping the energy and oil and gas supply chain move into hydrogen production, distribution and/or key areas of hydrogen demand such as transport and low-carbon heat.

Timeframe: 2022

24. We will provide the supply chain with a clear line of sight to opportunities by creating a visible pipeline of projects.

We will work in partnership with our Enterprise Agencies, trade associations and other relevant stakeholders to explore the requirement for an online tool to ensure that companies have clear visibility and access to information about upcoming hydrogen project opportunities in order to maximise the potential for Scottish content. We will work with our Enterprise Agencies to analyse what is currently available in this respect, identify gaps, and provide an update in the Energy Strategy refresh.

Timeframe: 2022

25. We will work with industry and partners to establish the skills to underpin our energy transition.

We will ensure investment in skills, including work-based learning, further and higher education, and upskilling and reskilling, is fully aligned with our economic ambitions for a net zero transition, through our Climate Emergency Skills Action Plan.

We will work with industry to assess the workforce demand for a hydrogen economy. We will ensure future skills actions and provision to 2030 is informed by this work and training programs are tailored to meet the demand for new specialist skills, promoting opportunities for STEM students, graduates, and hydrogen engineers, particularly in regional locations where projects are likely to be based, e.g. through the new National Energy Skills Accelerator (NESA) being established in Aberdeen, to prepare the workforce for the energy transition and to provide access to new skills and capabilities required for delivering the net zero agenda.

We will engage with industry and partners to assess how the Just Transition Commission's recommendation to create a long term 'skills guarantee' for workers in carbon-intensive sectors, could help to develop the specialist skills and workforce required to underpin the hydrogen economy.

We will work with the National Manufacturing Institute Scotland (NMIS) and the sizeable Scottish manufacturing support network to help companies reduce their barriers to innovation and transition to new market opportunities.

Timeframe: 2022

26. We will fund a Hydrogen Business Development service, delivered through the Energy Technology Partnership, to accelerate knowledge exchange between academia and enterprises to stimulate innovation in the hydrogen sector.

We will continue to work with the Energy Technology Partnership in support of their Hydrogen Theme, including through funding a Hydrogen Business Development Manager, that will facilitate pooling of academic knowledge and expertise to enable co-ordinated research activities, leading to new areas of innovation. The Hydrogen Business Development Service will facilitate collaboration between industry and the academic research community, through events, forums and a £100k engagement fund.

Timeframe: 2021-24

5. Establishing and strengthening international partnerships and markets

Analysis completed in the Scottish Hydrogen Assessment in 2020, showed that Scotland has the capability to produce quantities of hydrogen far greater than are required for a domestic market. Over the next few years, we will focus on taking action to secure the role of Scottish companies in the global hydrogen supply chain, to work with our international partners to share expertise and develop the sector more quickly, and to ensure Scotland is prepared to play a key role in meeting the growing demand for hydrogen from import countries in Europe.

27. We will work with industry to produce a Hydrogen Export Plan.

We will work with industry to explore the steps needed to realise Scotland's hydrogen export potential and to secure global supply chains. The Hydrogen Export Plan will consider the short-term export opportunities around skills and the supply chain, as well as the economic opportunity for Scotland represented by the export of renewable hydrogen in the longer term.

Timeframe: 2022-26

28. We will work to ensure our ports and terminal infrastructure matches our ambitions for a hydrogen economy.

We will undertake a review of ports and terminal infrastructure preparedness for hydrogen export building on work on key production sites led by our Enterprise Agencies.

Timeframe: 2022

We will also encourage collaboration with key ports in northern Europe, for example Rotterdam and Hamburg, in order to develop the relationships and the export/import infrastructure required, ensuring that Scotland's export and northern Europe's import infrastructures are compatible.

Timeframe: Ongoing

29. We will support the development of hydrogen transport options and international supply chains from Scotland to European customers.

In addition to funding provided to NZTC to, amongst other projects, assess Scotland's capability to link to the European Hydrogen Backbone initiative [ see Action 22] our Enterprise Agencies will support the Scot2Ger project, and the analysis of the business case for a demonstration project to start in early 2022 for the delivery of renewable hydrogen produced in Scotland to customers in Germany by 2024.

Timeframe: 2022

30. We will press the UK Government to take the action necessary at a UK-level to facilitate the smooth international trade of hydrogen, in line with Scottish export ambitions.

We will urge the UK Government to ensure that regulations do not act as a barrier to trade and investment, and to collaborate internationally to ensure standards developed for hydrogen in the UK align with international frameworks to allow a buoyant export market to be established.

Timeframe: Ongoing

31. We will work with our overseas offices and Scottish Development International (SDI) to boost inbound and outbound trade and investment missions to secure opportunities for Scottish companies in the international hydrogen market.

This includes inbound delegations such as that planned in Spring 2022 from Germany, inviting influencers, sectoral representatives and companies to engage with the sector first-hand and build future business. In the other direction it includes engaging with national sectoral organisations, with Scotland's partner hydrogen states, with key conference platforms and business fora, and with individual companies, to promote Scottish expertise and capacity.

Timeframe: Ongoing

32. We will develop a Hydrogen Outreach Programme.

Working through our global network of trade and investment offices, we will promote plans for export of hydrogen as well as international trade opportunities for Scottish hydrogen companies. Utilising the SDI outreach programme, which is active in markets across the world, we will engage over 280 internationally headquartered hydrogen companies that have been identified as potential targets for Foreign Direct Investment.

Timeframe: 2021-22

33. We will work to strengthen existing relationships and develop new bilateral partnerships.

In addition to strengthening our existing international relationships in relation to renewable energy, we will look to develop new collaborations on renewable hydrogen development with partner countries including, but not limited to, Germany, Belgium, the Netherlands, Denmark, Canada, Australia, Japan and France.

Timeframe: 2021-26

We are seeking to secure MOUs with partner countries to build hydrogen markets and our shared hydrogen economy, such as our new and planned agreements with Denmark, Hamburg and North Rhine-Westphalia. Also, following the recommendations set out in the final report of our Franco-Scottish research project^[8] on hydrogen and offshore wind, we will work with partners in France, and in particular Occitanie Pays de la Loire and Brittany, to pursue collaboration and trade agreements.

Timeframe: 2021-22

Case Study – Regional Hydrogen Energy Hub: ORION

The ORION project aims to provide Shetland with secure and affordable clean energy whilst protecting the environment and developing a new industry.

ORION strategic partners Shetland Island Council (SIC), Net Zero Technology Centre (NZTC), University of Strathclyde and Highlands and Islands Enterprise (HIE) are working with industry and key stakeholders to evaluate opportunities to maximize value and transition Shetland from an established oil and gas centre to a renewable energy hub.

The ORION project has three key aims:

• Create renewable hydrogen for export at industrial scale by harnessing offshore wind power.
• Transform Shetland's current dependency on fossil fuels to affordable renewable energy.
• Enable offshore oil and gas sector just transition to net zero by electrification.

Delivering these aims will place Shetland at the heart of clean energy developments, create a highly skilled workforce in the isles, and provide economic security for years to come.

The ORION project has set several ambitious local and regional targets:-

• Produce local wind-powered renewable hydrogen in Shetland by 2025.
• Sustain and create five hundred skilled jobs by 2030.
• Reduce carbon emissions for Shetland and become net zero by 2030.
• Contribute to reduce emissions from oil and gas infrastructure to become net zero by 2030.
• Eradicate fuel poverty in Shetland by 2035.
• Harness offshore wind to produce renewable hydrogen, producing over 10% of the estimated UK hydrogen demand by 2050.

6. Strengthening research and innovation

Scotland already benefits from a strong hydrogen research and innovation landscape with a large number of organisations and institutes working across different hydrogen technologies. We will continue to support these existing assets to drive critical research and technological advancements, and stimulate collaboration and knowledge sharing.

34. We will launch a Scottish Hydrogen Innovation Fund to drive technological progress and advance innovation in Scotland.

We will ring-fence £10m of the Emerging Energy Technologies Fund to support innovation and development over the next five years.

This will support a series of hydrogen innovation challenges to continue to drive advancements in hydrogen technology to improve the cost-competitiveness of renewable hydrogen.

More detail on the Fund will be shared in early 2022 as part of the launch of the EETF.

Timeframe: 2021-26

35. We will, in partnership with our Enterprise Agencies, establish a Scottish Hydrogen Innovation Network to provide support to the growing hydrogen research and innovation ecosystem in Scotland.

The Scottish Hydrogen Innovation Network will provide an overarching framework for Scotland's growing portfolio of hydrogen innovation assets. This will enable increased collaboration between those assets to increase the impact of their work and avoid duplication of effort while also ensuring that Scotland's company base is aware of the innovation capability that exists in Scotland and able to engage with the suite of facilities effectively to commercialise new products and services. The network will also help to enhance Scotland's international hydrogen innovation reputation by showcasing all that we have to offer in one place and helping international stakeholders to engage with Scotland.

Timeframe: 2022

36. We will support multi-national collaboration on research and innovation challenges.

This will include, for example, working with the UK Government to support the success of the Mission Innovation Clean Hydrogen Mission and participating in Hydrogen Europe's Regional Pillar.

Timeframe: 2021-26

We will support Scottish participation in applications for EU funding for innovation through the Clean Hydrogen for Europe Partnership, building on significant Scottish successes in previous EU hydrogen funding programmes.

Timeframe: Ongoing

We will provide funding support to the three-year MultiHyFuel project, which aims to ensure the safe deployment of hydrogen refuelling stations alongside other fuels within the UK and across Europe.

Timeframe: 2021-24

37. We will support the Scottish academic and research community to further hydrogen research.

For example, in 2021 we will launch a £150k research call to support collaboration between academics and applied research institutes in Scotland and Germany to tackle key challenges across the production, storage and distribution of hydrogen.

Timeframe: November 2021