Assessment of Low-Carbon Hydrogen Supply Chain Export Opportunities

This study aimed to research international market demand for Scottish supply chain capability across the clean and low-carbon hydrogen sector. The work examined the role that Scottish supply chain companies could play in the delivery of clean hydrogen projects through deployment of the relevant skills, products and services to key markets. It provides insight and evidence that can help inform the development of the Scottish Government’s Hydrogen Sector Export Plan. In summary, the research study’s key objectives were to:

• Review existing market information in relation to planned clean hydrogen production capacity out to 2040 by top ranked producing nations
• Assess existing in-market supply chain capacity and capability to deliver the projects required to meet production targets
• Provide recommendations on where the Scottish energy supply chain has competitive advantage and potential strengths to provide support through deployment of products, services and solutions across all aspects of the project lifecycle, from early stage feasibility to engineering design, construction, operation and maintenance
• Carry out an assessment of ease of market entry for those countries identified as having the greatest potential for Scottish supply chain companies

The research study used a first principles approach to break down each market, capturing the full range of supply chain needs and gaps, with a view to delivering recommendations for Scotland to be able to leverage opportunities to grow exports in the sector.

The methodology focused on three primary activities:

• Market and supply chain research – delivering a clear understanding of the market and supply chain
• Market prioritisation – identifying markets with the greatest potential for Scotland’s supply chain experience and expertise
• Market and supply chain assessment – a deeper dive to assess priority markets that offer the greatest potential for export of Scottish capability

The study found that Scotland is well positioned to export supply chain capability and skills in the low-carbon hydrogen sector, with more than 1,000 companies already exposed to the sector delivering products, solutions, and services across the supply chain. Case studies of five companies already exporting hydrogen services and skills are presented, illustrating the breadth of Scottish expertise in the hydrogen sector.

The study identified Scottish supply chain strengths across hydrogen production, hydrogen mobility applications, and cross cutting services such as project development and operations and maintenance alongside cross cutting products, such as process and electrical equipment.

The study identified Egypt, Chile, India, Australia, Spain and Morocco as priority markets primarily driven by the size and scale of their hydrogen ambition, the perceived likelihood of a gap in their domestic capabilities, and Scotland’s ability to capitalise on the opportunity. 

This report reflects a snapshot in time. Alongside identifying priority markets, the assessment has built an evidence base to enable further analysis and support decision making by relevant organisations in tailoring activity designed to enable export growth for the Scottish supply chain in the clean hydrogen sector.

Future work could focus on the sensitivity analysis performed to identify countries that may have close links to Scotland but which scored poorly due to one particular metric – for example, the USA, where existing supply chain capability in that market was considered to be very strong.