Chamber and committees

On the point about economic growth, earlier, my colleague Kevin Stewart intervened on the Deputy First Minister to highlight Harbour Energy’s announcement on the loss of 250 jobs. I press the member to ensure that our Scottish Labour colleagues do everything that they can to persuade the UK Government that its fiscal regime—in other words, the energy profits levy—is damaging Scotland.

Will the member take an intervention?

The ambitious but focused scope of today’s programme for government is very welcome, given that, yet again, it is drawn together in the most difficult of times, as the UK Government chooses an austerity agenda that continues to limit Scottish Government actions and the fiscal context in which it operates. As the UK Labour Government continues to embrace the folly of Brexit, I welcome this programme for government, which centres on economic growth, tackling child poverty, improving public services and delivering on net zero. The climate crisis is very real.

Scotland hosts an abundance of small and medium-sized businesses, including in the energy sector. They support well-paid jobs and play a fundamental role in the wellbeing of communities.

The Scottish Government’s renewed focus on the economy over the past year or so has been very much welcomed across the energy industry. The fact that the current global environment for trade is challenging, not least because of US tariffs, makes it all the more important that our domestic policy gets it right for our businesses.

The UK Government’s decision to increase employer national insurance contributions has increased the tax burden on businesses, with a disproportionate and hugely damaging effect on the most labour-intensive sectors. I welcome the First Minister’s update on supporting our food and drink sector and the development of a new six-point export plan to support exporters to diversify and grow their markets.

Fundamental to the success of our businesses is having a skilled workforce. In the energy transition ecosystem, the long-term sustainability of our workforce is crucial to securing investor confidence and continuing to develop the next-generation clean energy technology that is already globally recognised and delivering on many of the Scottish Government’s policy priorities. PwC’s latest green jobs barometer shows that Scotland has the highest proportion of green job adverts in all UK nations and regions, with the size of the green jobs market in Scotland having tripled since 2021.

The north-east is already home to an incredible range of start-ups and technologies that have been successfully commercialised. I know that there is an appetite to tie in a new accelerator programme in the north-east to the national strategy for economic transformation. I gently put that on the Deputy First Minister’s radar as part of a programme for government going forward.

The skills of our existing talented oil and gas workforce are transferable and mobile, so it is crucial that we harness them here, in Scotland, to scale up our offshore wind sector. I very much welcome the creation of a new £2.9 million proof-of-concept fund to support the commercialisation of research projects with significant economic potential and an improved ecosystem fund to support the start-up environment. That is highly relevant to the north-east and the wider Scottish economy.

I particularly welcome the removal of peak rail fares. That is an excellent announcement, and I welcome this afternoon’s debate on increased Scottish Government funding, should the Acorn project get the go-ahead. I join the Scottish Government, business leaders and colleagues in calling on the UK Government to support Acorn without delay.

As was highlighted in Katy Clark’s line of questioning, there are many factors behind changes in the incidence of sexual offences reporting. The latest increase is to be taken very seriously, and I hope that it reflects the fact that more women feel able to come forward. Will the cabinet secretary further outline what action the Scottish Government is taking to ensure that every woman who comes forward feels respected and supported throughout the whole process?

Will the First Minister expand on the six-point export plan? Which specific international markets will be targeted and through which export sectors, and how will the package of measures support Scottish companies to reach global markets at a time of particular economic uncertainty due to US tariffs?

Yes, I am aware of that. That example goes to show that, although developments in Aberdeen have not been without challenges, they have led the way across Scotland, which is to be commended.

The flagship hydrogen campus in the energy transition zone in my constituency is set to become home to a new green hydrogen test and demonstration facility, a multimillion pound collaboration between Energy Transition Zone Ltd and TÜV SÜD, which will help to drive forward the use of industrial green hydrogen and deliver the energy transition.

This week’s Scottish Renewables supply chain impact statement reflects the progress that is being made in green hydrogen, including the European Marine Energy Centre in Orkney, which is pioneering developments in green hydrogen, and a highlight in the form of the Ardbikie distillery becoming the world’s first distillery to be powered by green hydrogen.

I note members’ comments on transport. At least one business in my constituency is seeking to transition to manufacturing hydrogen pressure vehicles for the renewables sector. However, key to that is funding a cost-efficient and safe option.

Scotland has two Governments in relation to energy, and many of the levers that are required to develop Scotland’s hydrogen economy sit with the UK Government. One of those levers is the regulatory framework, without which progress is restricted, so I ask the cabinet secretary for an update on progress on developing the necessary regulations to further develop hydrogen infrastructure, power and storage.

That leads me to my final point. Project willow, which has already been mentioned, has identified hydrogen production as one of the key pathways for the cluster. However, it is more commercially viable if the Acorn carbon capture project has track 2 status. I join business leaders, the Government, colleagues and stakeholders in calling on Scottish Labour to put its shoulder to the wheel and demand that the UK Government provide urgent clarity on the project today.

It has been an interesting week to have a debate on Scotland’s hydrogen future. The week began with Portugal and Spain experiencing major disruption caused by failure of the power system, which underlined the fragility of the way in which we live our lives. It was a week in which crude oil refining ceased at Grangemouth and in which the Climate Change Committee reported that the UK Government has yet to change its approach to effectively tackle climate risks. This is not where we want to be. The window for keeping global warming within the limit of 1.5°C is closing. If we ever needed any more evidence that the world is running short of time to avert catastrophic climate change, this was it.

However, today is about acknowledging and even celebrating the progress that is being made in Scotland’s hydrogen industry and about looking ahead to the future, so, in my case, what is needed is less higher chemistry and maybe a bit more higher economics.

Scotland has ambitious climate goals. I have always believed that setting rigorous targets shows that we are prepared to take strong action. That action will be delivered through the just transition targets. Targets focus minds, they remind us that we must always do more and they make us innovate, which is important.

Scotland is a treasure trove of innovators in the energy sector, including companies and investors who are now applying years of experience in the oil and gas industry to support the wind, carbon capture and storage, and hydrogen markets. As the motion outlines, hydrogen represents one of Scotland’s greatest industrial opportunities since oil and gas. We have the energy history, skills and experience to be a driving force in the hydrogen sector in Europe and beyond.

As we continue the transition to net zero, green hydrogen will play an increasingly important role, particularly in industry, as organisations decarbonise their operations. Underpinning the development of a hydrogen economy in Scotland is the Scottish Government’s hydrogen action plan, which commits £100 million of capital funding for renewable hydrogen projects and enterprise agencies, supporting businesses to access new opportunities. The Scottish Government’s hydrogen export plan recognises the opportunities that are arising from countries that are looking to countries that can provide energy from hydrogen at scale. As we have heard, Scotland is well placed to service future export markets for hydrogen, presenting us with a significant industrial opportunity.

Not to disappoint, Aberdeen continues on its journey as a hydrogen city and has a strong track record as an area of innovation, working across European and domestic Governments to develop the working technology for hydrogen vehicles. In addition, the Aberdeen hydrogen hub, a collaboration between Aberdeen City Council and BP, supported by £15 million of Scottish Government funding, is making very good progress. That links to Sarah Boyack’s point about hydrogen being an issue right across the Government.

This week, Scottish Renewables published its latest supply chain impact statement, which showcases a diverse range of businesses working across Scotland’s renewable energy supply chain, including Apollo, GQS and Ternan Energy in Aberdeen. Will the First Minister join me in welcoming the report, which represents nearly 10,000 jobs? Will he also outline how the Scottish Government is supporting the renewable energy supply chain to capture economic benefits for Scotland?

We could ask many follow-up questions on that, but I will leave that for now and open it up to members. I will bring in Liam Kerr then Ben Macpherson.

I have a quick follow-up question. Schengen is a pivotal system, but we can no longer benefit from it. When it comes to the TCA negotiations, how important is it for us to strive to move closer to the access that we used to have to that particular system? Is that point likely to be included as part of the negotiations? How important is it that that be a priority? That might be a difficult question to answer.