Funding for development of hydrogen projects

This Scottish Government funding supports projects that focus on the low-cost, efficient and sustainable production of renewable hydrogen in Scotland.

The funding will help cover development costs for projects that focus on the low-cost, efficient, and sustainable production of renewable hydrogen.

Eligible projects should contribute to the scale-up of the hydrogen economy in the 2020s, and should ideally be linked to the realisation of regional hydrogen hubs by the early 2030s.

Some funding may be awarded to other projects that will help to develop the hydrogen production supply chain.

Which projects does this funding support?
This fund was created to support renewable hydrogen production projects in Scotland with a production capacity of between 5 and 400 megawatts.

The UK government's Second Hydrogen Allocation Round (HAR2) guidance defines renewable hydrogen as being (at least one of the following):
- Electrolytic
- From gasification, pyrolysis of biomass, or wastes
- From gas splitting that produces solid carbon
This call is specifically for projects seeking research and development (R&D) support for development expenditure (DEVEX) on stages including feasibility studies, pre-Front End Engineering Design (FEED), and in some instances FEED work (select and define), ahead of Final Investment Decisions (FID) being taken. 

Priority will be given to projects that contribute to achieving Scotland’s strategic objectives of:
- Growing the hydrogen economy
- The future development of regional hydrogen hubs
- Benefitting the supply chain
- Obtaining value for money
- Funding may also be allocated to other projects that will develop the supply chain. For example, these could include – but are not restricted to – the design and manufacturing of electrolysers or other core components for activities such as hydrogen transport and storage.

At present, funding is only available for activities completed within the current 2024 to 2025 financial year, up to 31 March 2025.
However, applicants are encouraged to provide details in their Expression of Interest (EoI) of additional activities and costs that would extend beyond 31 March 2025. This will help SE better understand future market needs, and allows signposting you to other funding opportunities.

Am I eligible?
Your application must demonstrate that your project:  
- Will be operational by 31 March 2030
- Would not go ahead or would progress at a much slower rate or on a smaller scale without the requested funding
- Has access to finance from other sources to cover the total project costs
- Will finalise its eligible deliverables by the specified project end date (31 March 2025)
- Uses core technology that has been tested in a commercial environment at technology readiness level 7 or higheropens in a new window
- Can identify the supplier(s) of this core technology (for example, an electrolyser), or has a defined process in place to do so

If your project will be producing hydrogen, your application should also show evidence of engagement with at least one domestic off-taker that meets the definition of a qualifying off-taker in the UK government hydrogen production business modelopens in a new window. This can take the form of an agreement (or evidence of progress toward an agreement) such as a letter of intent or Memorandum of Understanding. Projects that target additional customers in an export market (UK-wide and Europe) will also be considered.

Projects in receipt of other sources of public funding – such as matched funding from another government fund – may be considered ineligible if they breach subsidy control limits.

Projects that produce hydrogen for use on the same site – that is, where the producer is also the off-taker – are eligible. 

Projects that produce hydrogen to make hydrogen derivatives – including, but not limited to, e-methanol, sustainable aviation fuel (SAF), ammonia, and liquid organic hydrogen carriers (LOHC) – as their final sale product are also eligible.

Applicant criteria
The funding call is open to all public and private sector applicants. Proposals will be welcomed from single organisations or consortia. For consortia, a lead partner must be identified.

The project lead must be an organisation of any size registered in the UK. 

Third parties (for example, a consultancy) may prepare an Expression of Interest (EoI) or an application on behalf of the lead applicant. However, the grant provider will not have a legal relationship with or pay money to any party other than the lead applicant. 

If consortium members are part of multiple applications, they must confirm that they would be able to deliver all projects if successful. 

Subcontractors are allowed and can be based in Scotland, the UK, or internationally, as long as their costs are justified and appropriate to the total eligible costs.

Similarly, consortia may include international partners, but we will only support costs incurred by the UK-registered partners.

Find out more here

Complete an expression of interest (EoI) form and send it to enquiries@scotent.co.uk by 27 September 2024.
Download an EoI form here