Chamber and committees

To ask the First Minister whether he will provide an update on the Scottish Government’s latest engagement with the United Kingdom Government regarding the status of the Grangemouth refinery. (S6F-02760)

It is indeed heartening to hear that the UK Government is now open to giving support to the vitally important chemical cluster at Grangemouth, which is in my constituency. There is the potential for the refinery to transition quickly to a biorefinery to be utilised for sustainable aviation fuel—in other words, there could be a just transition for workers right now. That would require support from the UK Government in respect of its policy barriers surrounding the hydroprocessed esters and fatty acids—HEFA—cap. What indications, if any, are there that the UK Government realises that potential, and that it is willing to take the necessary steps and act in the best interests of Scotland for that vitally important national asset?

One of the challenges here is to ensure that, in the bill itself, there is a delicate balancing of the rights of the victim and the rights of the accused. Having that as a necessity as part of a risk-based approach would go some way to doing that, although, as you concede, it might not be perfect. Am I correct that your point is that it should be intrinsic to the bill?

On a point of clarity for me, while I accept what the minister is saying about the ambiguity in the context of amendment 189 itself, has she done any further thinking on the principle of the victim’s right to be kept informed, particularly for a very traumatic thing, as is done in other areas? Is she therefore suggesting that further consideration will be given to that principle in time for stage 3, or is the Government discounting the principle altogether?

To ask the Scottish Government what its most recent assessment is of the potential impact of the border target operating model on rural affairs in Scotland. (S6O-02995)

Will Douglas Lumsden take an intervention?

I remind Douglas Lumsden that, with regard to capital expenditure, the Scottish Fiscal Commission projects a 20 per cent cut from the UK Government to the Scottish Government. It is that vital capital that is important to grow the sector. Is he aware of that figure, and does he support that cut?

That is a good question. I suspect that I will be out of alignment with the policy, as ever. I am putting it very clearly that I am very much against falling off a cliff. We all need to be sensible about that. In fact, as Al Denholm put it in the Scottish National Investment Bank’s “Transition Finance 2023” report:

“For transition to net zero to succeed, we need the skills and capabilities of the people and organisations currently working in the fossil fuel supply chain. A just transition means bringing them on this journey with us, not leaving them behind. And that will take long-term, strategic investment.”

It is therefore absolutely about real, active partnership, not merely to protect current jobs, but to invest in the future and realise opportunities.

Let us take, for example, the situation in my constituency regarding the future of the Grangemouth refinery. Scotland and, indeed, the UK need the refining skills, business capability and supply chains that are currently serving our economy. The decline of fossil fuel refining should not be the end of refining in my constituency.

Part of a just transition must involve the establishment of, for example, biofuel refining capacity, including to support the development of sustainable aviation fuels. Those fuels will play a critical role in reducing aviation greenhouse gas emissions.

I was very disappointed to learn that the UK Government’s sustainable aviation fuels plan, included in its £15 million green fuels, green skies competition, led to funding being given to eight projects, but none of those was from Scotland. However, the still modest £165 million advanced fuels fund might be a further opportunity. I hope that, if that comes to pass, the Scottish National Investment Bank, given its already stated views, would be a willing partner.

One possible process involves hydrotreated esters and fatty acids—or HEFA—which refines vegetable oils, waste oils or fats into sustainable aviation fuels through a process that uses hydrogenation.

Because of refinery capabilities and wider planned developments in Grangemouth, it would seem to be the ideal centre for urgent investment from Government and the private sector to realise new opportunities. I am aware that the Scottish Government ministers Neil Gray and Gillian Martin are involved in very purposeful discussions on Grangemouth and are working hard on the matter. I thank them for that. It may be that the minister is able to provide further updates in his summing up.

It is clichéd to say that every problem is also an opportunity. However, in the case of Grangemouth, it may well be that the current problems will act as a spur—indeed, they should—for future strategic investment from the public and private sectors. As Willie Rennie put it, the mood music is important in that respect. I will certainly be doing all that I can as the local member to support the development of a sustainable future built around Grangemouth.

There has been quite a bit of chat about the SPICe paper and the budget. For complete accuracy, I put on the record that the Scottish Government’s budget will rise by 2.6 per cent in cash terms or, in so-called real terms, 0.9 per cent after taking inflation into account. I really do not think that people should be shouting from the rooftops about that, to be absolutely frank. All the people who are claiming that they have read the SPICe paper clearly have not read it.

I will move on to my speech.

I very much welcome the cabinet secretary’s speech because, to my mind, effective investment in the green economy will require the Scottish Government, the UK Government and the private sector to be on the same page on an investment strategy. It absolutely requires a clear focus, mutual ambition and support.

The chief executive officer of Offshore Energies UK, David Whitehouse, said in his letter to the Chancellor of the Exchequer in October last year:

“In the right investment environment, UK offshore energy companies could invest £200 billion in homegrown energy this decade alone.”

Given the profile of Scotland’s economy, we should expect a significant level of private sector investment that is counted in the tens of billions of pounds and dwarfs the amount of capital spend available to the Scottish Government. However, regrettably, that is not guaranteed.

Final investment decisions have to depend on policy, planning and design over several years as well as on having retained and enhanced capacity and capability among businesses. That brings me to a point that Willie Rennie made. That absolutely emphasises the need for a stable policy environment, and facing the challenges but also exploiting the opportunities together. It appears that, in fairness, only the Scottish Government is staying the course in that regard, with both the Tory Government and Labour, as the potential next Government, weakening their commitments.

Effective investment in the green economy of sufficient scale is needed to make a real difference, and it is dependent on an effective transition strategy that is backed up by practical commitments. In that respect, I am very much looking forward to the Scottish Government’s green industrial strategy—the meat, if you will.

I feel—I will put this on the record—that there is naivety in some quarters when there are calls for the abandonment of any investment in fossil fuels, thereby creating a cliff edge for the businesses that are needed for an effective transition. I say that because I am well aware that we desperately need the existing energy supply chains to support investment in the future and, critically, to supply the necessary skills, capacity and capability for a sustainable green economy.

Will the cabinet secretary take an intervention on that point?