To ask the Scottish Government, as part of its work to develop a green industrial strategy, what discussions the economy secretary has had with ministerial colleagues regarding the role of hydrogen production in boosting economic growth. (S6O-03551)

The Cabinet Secretary for Net Zero and Energy and I have joint responsibility for, and are engaged in extensive discussions on, the green industrial strategy, which will set out a clear view of the economic sectors and industries in which we have the greatest strengths and potential to develop globally competitive industries.

The development of a domestic hydrogen sector and hydrogen production for export, supported by a strong supply chain—including in Kevin Stewart’s Constituency—will play an important role in supporting that just transition. The growth of our hydrogen sector presents significant long-term economic opportunities for Scotland and is a priority opportunity area for green growth.

What is the Government doing to maximise our potential by ensuring that vital plant required for hydrogen production is manufactured in Scotland? Are the likes of the enterprise agencies and the Scottish National Investment Bank actively providing support to companies in Scotland that might wish to diversify into areas such as the production of hydrogen electrolysers?

In short, Scottish Government officials and the enterprise agencies are maintaining close connections with domestic and international hydrogen developers to develop opportunities to attract electrolyser manufacturers to Scotland.

In 2023, we commissioned an assessment of the state of electrolyser manufacturing globally to support an understanding of the supply chain opportunities in Scotland. The figures speak for themselves: the “Scottish Hydrogen Assessment” report concluded that large-scale production of renewable hydrogen could create and protect between 70,000 to more than 300,000 jobs and has potential gross value added impacts of between £5 billion and £25 billion a year. The potential is enormous.

To make the most of Scotland’s huge opportunity in relation to the green hydrogen economy will require investment of significant scale, yet the Scottish Government has cut that budget. It will take hundreds of millions of pounds to effect the change required to create those jobs in a just transition. Will the Scottish Government make the investment required to realise Scotland’s potential?

This is an area where we see huge opportunity for Scotland, but we also need to be blunt in recognising that the investment required is of such a scale that it will require both Governments to work together, as well as work with the private sector. We need clarity and certainty from the United Kingdom Government on the scale of the investment. The Scottish Government will continue to invest where we see big opportunities, but we need partners in the private sector and the UK Government to join us.

Given Shetland’s long history of energy production expertise, what role does the Scottish Government see for Shetland in the future Scottish hydrogen production industry and in terms of economic growth potential?

I see huge opportunity for Shetland and for our other island communities, too. As a representative of one such community myself, I think that with such a transition, we need to make absolutely sure that the benefits are enjoyed and that there are legacy benefits for our islanders in particular. I think that Shetland—and, if I may say so, Orkney—demonstrated how to support communities in the last energy transition, and we can learn from them and implement those lessons in this transition.