The £10 million Hydrogen Innovation Scheme will provide capital support over the next four years and aims to unlock additional private investment in the technology, and enable new companies to enter the sector.

The first round of funding will target:

• projects that support the low-cost, efficient and sustainable production of renewable hydrogen
• projects that support efficient hydrogen storage and distribution, both within Scotland and for export
• projects that support the efficient integration of hydrogen into our energy system

The scheme is part of a Scottish Government commitment to invest £100m in hydrogen over the course of this parliament. This is part of a wider £180m package of investment in emerging energy technologies which will be delivered as set out in its updated Climate Change Plan.

Net zero & energy secretary Michael Matheson 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.

“The Scottish Government is committed to working with the energy sector to establish hydrogen as an important part of a cleaner, greener energy system, supporting a just transition for the industry both home and abroad.

“Our offshore wind resources, which will increase massively in the coming years, offer huge opportunity for the Hydrogen sector to grow. As set out in our Hydrogen Action Plan, and our clear ambition to have 5GW installed hydrogen production capacity in Scotland by 2030 and 25GW by 2045.

“We are open to the world and actively seeking opportunities to collaborate with international partners. The Hydrogen Innovation Scheme provides important, near-term investment to help the sector develop, diversify and realise its potential to support our transition to a net zero economy.”

Andy McDonald, head of low carbon transition at Scottish Enterprise, said: “Scottish Enterprise is collaborating with Scottish Government to develop opportunities in the hydrogen sector in Scotland that will maximise the economic benefits and support energy transition. We share the ambition to develop Scotland as a leading hydrogen nation. Innovation is a big part of that as it is at the heart of economic development.

“It is important in an emerging sector like hydrogen that we support Scottish companies and projects now to develop new techniques and technologies which can help us to realise our future ambitions in this sector and to retain as much value and intellectual property in Scotland as possible. Scottish Enterprise is engaged with the Hydrogen Innovation Fund and supporting its implementation.”

Nigel Holmes, chief executive officer of the Scottish Hydrogen and Fuel Cell Association, added: “The Hydrogen Innovation Scheme will help Scotland to develop our hydrogen supply chain and build the international partnerships to grow Scottish capacity and export capabilities. This is a great opportunity for our manufacturers, innovators, and researchers not yet involved in the hydrogen sector to establish new activities in Scotland.”

John Andresen, hydrogen strategic champion at the Energy Technology Partnership, said: “The Energy Technology Partnership is very pleased about the new Scottish Government’s £10 million Hydrogen Innovation Scheme which will foster national technological progress and advance home-grown innovation. A key funding route for the green powerhouse of Europe.”