Written evidence submitted by Forth Ports Group (HCC0041)

Summary

 

  1. Forth Ports Group is pleased to contribute to the Scottish Affairs Committee inquiry into hydrogen and carbon capture in Scotland.  The industrial cluster around the Firth of Forth will be central to the nation’s pursuit of a hydrogen (green and blue), CO2 shipping, sustainable fuels and CCS future.

 

  1. Forth Ports (or the Group) welcomes the commitment by the UK Government to create a hydrogen economy in the UK Hydrogen Strategy.  The Group acknowledges the important role hydrogen will play in our future energy mix and the emerging integrated energy system. Forth Ports is well placed to support the developing hydrogen economy, contributing to the nation’s progress towards a net zero economy.  The Group will deliver projects in support of these plans, including how our objectives match those of the UK and Scottish Government’s.

 

Overview

  1. Forth Ports’ strategic port estate comprises the ports of Leith, Grangemouth, Dundee, Rosyth, Methil, Kirkcaldy and Burntisland in Scotland, and the Port of Tilbury and Tilbury2 on the Thames. Forth Ports is also the statutory harbour authority for the Forth and Tay, which includes the Houndpoint and Braefoot Bay marine terminals.
  2. The Group handles over 41 million tonnes of cargo, and contributes nearly £1bn of economic value annually. Grangemouth is home to Scotland’s largest port and principal export hub (handling 30% of Scottish GDP) and its major petrochemical cluster. Our ports have played a key role in the energy markets for over 250 years and will continue to be key to driving the energy transition; supporting and developing the country’s aspiration to move to a more integrated energy system, including low carbon products and fuels such as hydrogen and CCS.
  3. Forth Ports continually works to reduce its carbon footprint and emissions and has tracked a reduction over time by implementing a number of initiatives. As part of the company’s future focus, we will explore how hydrogen can improve our own operations. The Group will also work on a ‘Team Scotland’ basis to increase the pace and scale of transitional projects in a way that is sustainable, both environmentally and socio-economically.
  4. Forth Ports is supportive of an increased pace of development and believes UK Government's target of 5GW of low carbon hydrogen production by 2030 is achievable.
  5. To facilitate this headline objective, the Group has a vision to create a Green Freeport and a Firth of Forth Net Zero Hub (FFNZH) at the heart of Scotland that delivers a just and practical energy transition to meet the UK and Scottish Governments’ net zero and energy transition targets.
  6. The Group wants to ensure Scotland’s largest remaining industrial hub continues to thrive creating new, high quality, green energy and manufacturing jobs at the same time tackling deprivation around our ports and contributing to the levelling up of the large industrial areas in our coastal communities. Green freeport status will be key with preliminary modelling estimating the potential opportunity for a Firth of Forth Green Freeport could create up to 50,000 direct/indirect jobs and about £3billion of additional GVA.

What should be the focus of UK Government investment to ensure that Scottish industry, supported by Scottish research, is able to become a world leader in green hydrogen for domestic use and export?

  1. To deliver a FFNZH as a new complex integrated energy system, with emerging multi-interdependences, a number of key attributes in situ need to be leveraged to drive change, as per other UK and global net zero hubs. All of these characteristics have been identified as being present within the Firth of Forth area by leading independent energy research consultancy, Wood MacKenzie, who have published a case for a Firth of Forth Net Zero Hub, which will match the scale, significance and capability of the other leading UK hubs along the Humber and Tees[1].
  2. The geographic, socio-economic and infrastructure characteristics of the Firth of Forth can be leveraged to accelerate the pace and scale of the transition to deliver projects in support of emission reduction, new fuels and technologies such as hydrogen and carbon capture. These include:

•         Established industrial area with extensive fuels infrastructure

•         Renewables manufacturing capability

•         Skilled workforce

•         Access to renewable power generation

•         Pipeline network access

•         Proximity to domestic energy consumers

•         Storage and bunkering capacity

•         National fuels production and distribution hubs connected to the Port

•         Deepwater marine accessibility

•         Established international import/export trade

•         Multi-modal transport linkages

•         Long history of large scale bulk liquids trading

•         Direct North Sea access to renewable energy and carbon sink storage.

  1. Furthermore, Forth Ports is already playing a key role in the delivery of the emerging integrated energy system and the future production of low-carbon hydrogen through its investment in port infrastructure to support the UK’s drive to increase the country’s offshore renewable energy generating capacity to produce low carbon electricity. This is demonstrated through the £70m package of works at the Port of Dundee to support EDF Renewables UK and Siemens Gamesa to deliver the 450MW Neart na Gaoithe offshore wind farm and the 175-acre Leith Renewables Energy Hub, which has the potential to:

•         Make a major contribution to Scotland achieving its 2045 net zero greenhouse gases target

•         Secure the Firth of Forth as the driver for Scotland’s green energy transition

•         Help spearhead Edinburgh’s and Scotland’s Covid-19 recovery plan

•         Support up to 1,000 high quality, long term direct jobs and about 2,000 indirect jobs.

To what extent are the ambitions of the UK Hydrogen Strategy, published August 2021, adequate for Scotland?

  1. We would welcome further dialogue between ourselves and the UK Government to discuss how Forth Ports’ facilities and initiatives, such as pilot projects and trials. This could extend to being fully involved in any assessments, consultations and development to ensure port infrastructure is adequate to support future supply chains and provide the essential link between offshore and onshore activities relating to the new integrated energy system, as the supply chain pivots from oil and gas to offshore wind, hydrogen and CCS.
  2. Forth Ports continue to support the deployment of offshore wind development, and welcomes ScotWind and the initiative to accelerate delivery of future leasing rounds through a clear road map.
  3. The Group welcomes and supports the recognition of the vast export potential for hydrogen to Europe, which has ambitious hydrogen plans. Ports will be key in providing the supply chain connectivity both with UK and international hubs.  Collaboration between Scottish and European ports regarding compatibility of import/export infrastructure, vessel sizes and ship interfaces, and would be keen to participate in these discussions at the earliest stages, and build on the long trading history and existing links with international ports is key.
  4. We believe regional hydrogen hubs (RHH) are vital.  The Group’s port estates are ideal locations to support RHH, with the opportunity to host domestic hubs alongside regional and international import/export shipping facilities. Our ports are multi modal and have rail-links, they are frequented by heavy goods vehicles, which are both key transport areas for which hydrogen may be the preferred low carbon fuel.
  5. The demand in the hinterland directly around our ports is vast with 70% of Scotland population one hour from the Firth of Forth region. Creating hydrogen hubs around these demand areas makes logical sense, and the ports are an ideal location to do this.
  6. As outlined by Wood MacKenzie’s paper, locating these hubs in ports would capture many of the stages of the hydrogen value chain; production, distribution, storage, use in industry, for export, meeting high local demand and in transport networks (HGVS, trains, shipping).

Conclusion

  1. The Firth of Forth industrial area will play a vital role in facilitating the country’s net zero and energy transition ambitions creating new, high quality green energy and manufacturing jobs.
  2. By creating a Green Freeport and a Firth of Forth Net Zero Hub, our ports will ensure Scotland’s largest industrial cluster continues to thrive and provide highly skilled jobs for this, and future generations of residents in the central belt and beyond, while ensuring that the challenges of climate change are met.
  3. We want our ports in the Forth Estuary to assist Scotland and the UK in achieving its carbon reduction targets by supporting offshore wind deployment and working with industry and other stakeholders to deliver new, low carbon fuels and technologies, such as hydrogen and carbon capture, utilisation and storage.
  4. Forth Ports is already delivering key projects to support the deployment of offshore renewables in Scotland.  Our vision to create the nation’s largest offshore renewables centre at Leith will also support our work to see CO2 shipping and the hydrogen economy flourish.
  5. An initial assessment has found that vessel specifications and associated infrastructure requirements mean that a facility outside of the impounded dock at Leith will remove any draught limitations.  This would align the port with European ports hubs in terms of the scale of the interfaces required to support a hub-to-hub flow of green hydrogen and CO2.
  6. Companies continue to look for consistent and strong policy support and volume targets to provide confidence to invest.  The inevitable pricing and volume risks when investing in supply chain solutions and infrastructure to deliver these new fuels needs to be considered and overcome.
  7. Forth Ports would be happy to host a site visit by the Committee and give oral evidence on this topic area.

March 2022

[1] https://www.woodmac.com/press-releases/firth-of-forth-net-zero/