Scotland is on the edge of an extraordinary opportunity. With its vast onshore and offshore renewable resources, with its highly skilled workforce and pioneering businesses, and with its reputation for technological excellence and innovation, it is poised to become a true pioneer of green energy.
And these assets mean it has the potential to not only lead the global charge towards net zero but also to seize the economic opportunities that come with it. The Hydrogen Backbone Link (HBL), which offers the game-changing prospect of exporting Scottish hydrogen via an undersea pipeline directly to European markets, is a key part of this endeavour.
This is not simply about delivering net zero but realising the full economic benefits of doing so in a massive global market with huge export potential. As the Net Zero Technology Centre’s new report shows, the HBL is vital to kickstarting both the European and Scottish green hydrogen economies. It will directly create more than 700 jobs in Scotland on initiation and support up to 300,000 jobs in Scotland alone by 2045.
Equally, the HBL will be a critical catalyst for developing Scotland’s hydrogen industry, removing a major source of project uncertainty by providing a safe and reliable route to market. The new pipeline could enable Scotland to meet up to 10 percent of Europe’s projected hydrogen import demand by the mid 2030s, simultaneously helping the Scottish Government meet its green export ambition and facilitating continental Europe’s industrial decarbonisation as well.
But if we are to seize this significant opportunity, we need to act now. The scale of the intervention may initially seem daunting, but it is absolutely necessary if the transition is going to be an economic success story for Scotland and the wider UK. The reality is that we are operating in a competitive global net zero market and, without significant investment, we risk a flight of assets, innovation and talent to other countries where there is investment at scale, such as the United States.
Certainly, the HBL pipeline project should be looked on favourably by investors. The cost of the initial infrastructure is estimated at £2.7billion, creating a predicted yield of six percent at a transportation tariff of 32pence per kilo of hydrogen.
Equally, we need Scotland’s governments and businesses to continue to prioritise and invest in hydrogen and wind power developments. This is essential for ensuring security of supply and guaranteeing that the significant anticipated demand from European markets can be met.
In addition, we need a National Energy Storage Strategy to ensure renewable and hydrogen energy can be safely stored ahead of export. This vital for reliability, as well as ensuring market and consumer confidence. The UK and European governments should also agree to common standards and shared regulations, ensuring there are no artificial barriers to hydrogen export, and that it can be brought to market safely and efficiently.
The creation of the HBL will mark a critical milestone in Scotland’s quest not only to become a global leader in net zero, but also a pioneer in seizing the economic benefits of the green energy revolution. With the right support from public and private investors – as well as the people of Scotland more widely – we can ensure we fully seize the enormous opportunity offered by the HBL.