Review of demand for hydrogen derivatives and products

Scotland has abundant renewable energy resources that could supply significantly more energy than it consumes. This presents a substantial opportunity for Scotland to become a net exporter of low-carbon energy, boosting employment, supporting economic growth and helping to deliver international decarbonisation.

This research reviewed, assessed, and ranked the potential of technologies that could enable cost-efficient domestic and international trade of hydrogen, as well its derivatives and products. The report also identifies offtake sectors and countries, assesses the scale of demand in potential markets, and identifies gaps and opportunities in domestic and international policy.

The researchers carried out desk-based research and targeted stakeholder interviews to gather data and review a range of hydrogen derivatives and products.

Findings

Hydrogen and derivative offtake markets

• Scotland’s hydrogen potential poses an unprecedented opportunity to strengthen domestic industrial capabilities and cut greenhouse gas emissions. Hydrogen production capacity is anticipated to exceed Scottish demand in the future.
• Industrial clusters in Scotland, England and Wales all provide a large local market for hydrogen and its derivatives and products.
• The European Union and its member states are unlikely to meet their low-carbon hydrogen demand on their own, creating an export opportunity for Scotland.

Hydrogen derivatives

• Subsea hydrogen pipelines are critical to enhancing the competitiveness of Scottish hydrogen for trade within Europe.
• Ammonia is expected to be the dominant hydrogen derivative in the medium to long term for global trade.

Hydrogen products and end use cases

• Industry will be the biggest driver of hydrogen demand in 2030 in both the EU and the UK. By 2045, other sectors like aviation, shipping, power generation are also expected to be major players in the hydrogen economy.
• Some end-use sectors will be able to use hydrogen derivatives and products directly, avoiding substantial costs on reconversion.
• Synthetic methanol will be key to decarbonising existing industrial uses of methanol and in initial low-carbon maritime projects.
• Hydrogen is expected to play a significant role in power generation in the long term.
• Hydrogen-based Sustainable Aviation Fuels (SAF) are well-placed to decarbonise the aviation sector.
• The main low-carbon alternatives to hydrogen include Carbon Capture, Utilisation, and Storage (CCUS) and bio-based technologies.

For further details, please read the report.

If you require the report in an alternative format, such as a Word document, please contact info@climatexchange.org.uk or 0131 651 4783.

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