• Collaborative study shows that Scotland can answer the call of the growing German market for clean, green hydrogen as early as 2025
• Scotland’s renewable energy and hydrogen capabilities could supply globally significant demand as Germany fast-tracks switch from fossil fuels
• Study shows that there is already demand from potential customers who would take Scottish green hydrogen if it was available now
• ScottishPower and Wood explored the technical feasibility of producing green hydrogen in Scotland. DS Consulting investigated primarily the communication strategy as well as the Foreign Direct Investment & Trade potential. KPMG AG Germany focused on the transport from Scotland to and within Germany as well as the demand in the German market.
Scotland is perfectly placed to become an exporter of green hydrogen to a ready-made market in Germany, a study led by industry and supported by the public sector has found.
The ‘Scot2Ger’ research project, launched last November, examined the German demand for zero-emission hydrogen and how it might be met by Scottish producers of green hydrogen.
The findings highlighted the economic potential around faster growth in demand than initially expected, which falls in line with Scotland’s ambitions to scale up production.
The study for analysing the Scottish production and export potential was led by a team of Scottish and German companies and funded by ScottishPower, Wood, Scottish Enterprise and South of Scotland Enterprise and also supported by Scottish Government and Highlands and Islands Enterprise.
On the other side David Scrimgeour and KPMG AG Germany supported Scottish Enterprise in assessing the German market potential.
Analysis around the initial demand from three identified German use cases was found to be around 33 tonnes per day by early 2025 rising to 58 tonnes a day by 2027, before reaching 200 tonnes by 2030. Liquid hydrogen or ammonia was found likely to be preferred, particularly given Germany’s increased urgency to move away from fossil fuels given the ongoing conflict in Ukraine.
The study also predicted growing demand and production as green hydrogen costs continue to fall, technologies advance in efficiency, and the uses of hydrogen increase across the global economy in the period from 2030-2050.
It also examined the logistical challenges in transporting hydrogen from Scottish ports, the landing of the clean fuel in major European ports and the distribution to end customers across Germany.
The work included technical and economic analyses of moving hydrogen as a compressed gas as well as in liquid forms such as ammonia, liquid hydrogen and in liquid organic carriers (LOHC).
It identified Aberdeen, Cromarty and Forth and Clyde as potential early export locations, with preferred import ports at Wilhelmshaven, Lower Saxony, as well as Rotterdam in the Netherlands, Europe’s largest seaport.
Michael Matheson, Net Zero and Energy Secretary, said: “Scotland has the resources, the people and the ambition to become a world leader in hydrogen production for both domestic use and for export to Europe. Our draft Hydrogen Action Plan sets out how we will work with the energy sector to realise these significant opportunities and support a just transition for the energy sector.
“We are open to the world and actively seeking opportunities to collaborate with international partners and this report demonstrates the great opportunities that lie ahead. We have already signed memorandums of understanding with a number of international partners and I look forward to further collaborations becoming established in the coming months and years.”
Suzanne Sosna, Scottish Enterprise Director of Climate and National Opportunities, said: “The results of the Scot2Ger study highlight the economic opportunity for Scotland to produce and export clean hydrogen to Europe.
“This offers investment opportunities in Scotland that will bring significant economic benefits and not only support the journey towards a just energy transition but also help provide a secure solution to energy provision globally.
“Scottish Enterprise sees the hydrogen economy as a key area for economic growth and will continue to work with partners and industry to develop Scotland’s strengths across infrastructure, from ports to pipelines, as well as the manufacturing supply chain to create jobs and support net zero targets.”
Paul Wheelhouse, Lead for Energy Transition at South of Scotland Enterprise, said: “The development of green hydrogen production is a great strategic fit for the South of Scotland, which SOSE recognises as a key opportunity for our region.
“In the South, we produce approaching 20% of Scotland’s renewable energy, yet generators face constraints in terms of capacity to transmit power to the grid, limiting their ability to generate jobs and economic value.
“Production of green hydrogen provides a vital new route through which the region’s competitive advantage as a renewable energy powerhouse can decarbonise our energy intensive industries, transport and heating.
“The Scot2Ger study details the dynamic, growing market for hydrogen in Germany and the conditions for success to develop it.
“If we get our approach right, the prize is a potential to support up to 300,000 new jobs across Scotland’s hydrogen sector by 2045.”
Barry Carruthers, Hydrogen Director at ScottishPower, said: “The production of clean, green hydrogen is moving faster than anyone expected and new markets are materialising every week. It has been fascinating and exciting to work on this ambitious concept but now we can see a tangible way forward to make this export market, value chain benefits and green careers a reality”.
Alan Mortimer, Director of Innovation at Wood, said: “Scotland has a unique abundance of renewable energy, particularly in the form of wind power. Green hydrogen is now presenting the opportunity to turn this into an export industry for the benefit of the Scottish economy. Importantly, scaling up the production and use of green hydrogen will also allow us to meet energy security concerns and the need to deliver lower-carbon energy solutions to address climate change risks.”
David Scrimgeour of DS Consulting GmbH said: “As originator of the Scot2Ger concept to supply green hydrogen from Scotland to Germany by the middle of the decade, it is fantastic to see this project developing.
“For the German part of the study for Scottish Enterprise Dr Sylvia Trage of KPMG AG and I spoke to dozens of German companies about their requirements and it is clear that there is immediate demand as well as strong interest in longer term supply agreements.”
Dr.-Ing. Sylvia Trage of KPMG AG Germany said: “As part of our work for Scottish Enterprise, KPMG AG Germany analysed and evaluated the different transport options from Scotland to and within Germany. Additionally, based on the German industry demand as well as specific company demand, KPMG AG Germany identified three possible German use cases. This work has shown that Scottish hydrogen supply could support German companies in decarbonising their supply chains.”
Green hydrogen has been identified as having the potential to decarbonise a number of sectors like heavy industry, high temperature processes, chemical refining, feedstocks and long-range, heavy duty transportation.
The report builds on economic analysis from Scottish Enterprise last year around the potential of green hydrogen technology, infrastructure and assets to transform Scotland’s energy sector and follows the publication of green hydrogen studies outlining the requirements for sites in Scotland.
The details and outcomes of the studies will now form a basis of further work packages seeking to progress the technological innovations in logistics, as well as commercial opportunities to accelerate investments, supply chain growth and job creation in both Scotland and Germany.
The Scottish Government has already set a target of 5GW of hydrogen production capacity in Scotland by 2030 and the German market is also projected to grow rapidly over the coming years. By 2030, it is estimated to form the majority share of a European hydrogen import market tipped to be worth about £17billion.
Download the report here.