Up to £7 million in Scottish Government funding has been announced to help launch green hydrogen projects throughout the country.

The funding is being offered to support the development stage costs of green hydrogen production projects with capacities ranging from 5 to 400 megawatts—enough to produce hydrogen to heat over 16,000 homes.

Funding will also go towards work supporting the hydrogen supply chain and storage solutions, as well as playing an important role in helping the industry scale up to respond to market demand.

The scheme has been co-developed with Scottish Enterprise, which will facilitate and manage the fund, and complements a total of almost £7 million from the Scottish Government’s Hydrogen Innovation Scheme, which has supported 31 projects across the country since 2023.

Organisations now have until the end of the month to apply for a maximum of £2 million of match-funding, which could see them join the growing list of successful hydrogen production projects in Scotland.

So far that includes the development of the Glasgow Airport Hydrogen Innovation Hub, awarded £150,000, a sea water electrolysis project in Orkney from Locogen, supported with £112,838, and the establishment of a green hydrogen production hub in Stornoway, with over £1 million in funding.

Alasdair Allan, acting minister for climate action, said: “Our energy sector, and the development of green hydrogen in particular, will play a crucial role in growing Scotland’s economy and delivering on our net zero targets.

“This funding – which will help support the development of green hydrogen projects and hydrogen hubs across the country, will, in time, help unlock opportunities in hydrogen for use and export and to power the clean energy intensive industries of the future.”

The funding announcement aligns with the release of the Scottish Government’s latest Green Industrial Strategy last week, which specifically emphasises the expansion of the hydrogen production sector as a key future driver of the economy.

According to the plan, the production, storage, distribution, and even export of hydrogen will provide opportunities for employment and business growth, especially in more rural areas. 

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Both the highlands and islands and the south of Scotland are noted as potentially leading net-zero regions, where natural resources can be used to deliver both economic and energy transformation, with the Highlands and Islands Enterprise and South of Scotland Enterprise well placed to offer operational support.

It’s hoped that this funding, alongside the Green Industrial Strategy and the ongoing Hydrogen Action Plan, will help the country to achieve 5 GW of hydrogen production capacity by 2030, and 25 GW by 2045, as well as become a major competitor for the export of hydrogen into European markets.

On this latest funding, Suzanne Sosna, Scottish Enterprise director of energy transition, said: “This new fund will help new green hydrogen projects get off the ground, something that is critical if we are to build the hydrogen economy as we aim to in Scotland.

“Renewable energy, including green hydrogen, has the potential to transform Scotland’s economy and Scottish Enterprise is fully committed to helping hydrogen production, storage and offtake businesses as part of that.”