Chamber and committees

The measures that I have set out and the measures that I am announcing now indicate the importance and urgency that both Governments attach to intervention in this area. The Scottish Government has been able to set out its part in doing that.

I say all that because it is part of Scotland’s world-leading approach to just transition. We must make sure that that is embedded in our climate change legislation and in our independent body that we have established to advise on and scrutinise our work. We are now setting out to co-develop just transition plans for our key sectors, sites and regions.

I thank the member for giving way.

Lorna Slater asks what has been done to prepare Grangemouth for a new and greener future. Will she acknowledge that, through project willow and other efforts before that, the Scottish Government and others have sought to identify just such a future?

Stephen Kerr will be aware that the company concerned has—indeed, as he has just set out—blamed its decision on the global situation and not on Scotland stopping selling vans that are powered by petrol. Just for the sake of accuracy, Mr Kerr might wish to reflect on what the company has actually said.

This has been a constructive debate for the most part. I can think of only a couple of exceptions, but I will not be drawn further on that. I welcome the evident and shared commitment across the chamber to ensure a genuinely just transition for the people and communities at the two significant locations in Scotland’s energy system in which the committee took such a helpful interest.

The energy transition is an opportunity for Scotland. Indeed, the transition to net zero is one of the greatest socioeconomic opportunities that we have seen for a generation. However, events such as the recent announcements at the Grangemouth refinery underline the importance of capturing those opportunities for the people of Scotland. A number of speakers in the debate highlighted the real lives and families that are involved in that just transition. The committee reports that we have debated today are important contributions to that urgent national conversation.

At the same time as we support our oil and gas workers on that journey, we look to the future, and we will use all the powers that are at our disposal to make Scotland a great place to invest in green economic opportunities and to make sure that Scotland’s people benefit from that investment.

I will pick up on a few of the issues that members raised in the debate. In response to Murdo Fraser’s question about any potential sale of the refinery, I emphasise that that is a matter for its owners and not for the Scottish Government. To be clear, I cannot attempt to speak for the company on that.

On Claire Baker’s point about whether a just transition fund in the north-east would be vulnerable to changes to financial transactions, I reassure her that there are no financial transactions in the fund’s allocation for 2024-25.

Sarah Boyack spoke helpfully about the two Governments working together. I note that the cabinet secretary and I had what I felt was a very constructive meeting with Ed Miliband, and one of the first meetings—I think that it was the first meeting—between the new First Minister and the new Prime Minister touched substantially on the issue of Grangemouth.

A number of members mentioned the barriers to investment. I point out that the greatest of those is access to the grid. I hope that the two Governments, together, can make progress on that.

As I mentioned at the start of the debate, we published our green industrial strategy earlier this month, setting out how we plan to create the right conditions for private investment in sectors where Scotland has potential to compete in global markets. We are focusing on wind power, hydrogen, carbon capture and storage, and energy intensive industries, as well as our green professional and financial services.

Murdo Fraser made a point about planning constraints. The Scottish Government acknowledges some of the issues that he mentioned and we are seeking to address them through measures such as our planning hub, which seeks to support the planning system, particularly around hydrogen.

As I mentioned, the Scottish Government has long understood the criticality of the wider Grangemouth cluster. That is why we made a commitment to develop a just transition plan that set a clear strategic direction for the future of the whole site and recognised the need for that to change in the future. That is what project willow has been about.

Today, I will update Parliament on our decision to introduce a short delay to the development of the Grangemouth plan. It is important to separate all these things out. I have mentioned some of the direct, immediate interventions that the Scottish and UK Governments are making. With regard to the Grangemouth plan, that will allow us time to consider the recent refinery announcement and to incorporate critical evidence from the project willow study, to ensure alignment between those important pieces of work. That is distinct from, and in addition to, the more immediate work that we have just described. We will launch our consultation on the draft plan shortly, with a view to delivering the final plan in the spring of next year.

The Just Transition Commission has said that Grangemouth represents the first “litmus test” of a successful just transition in Scotland. Although the recent announcement is disappointing, I outline the Scottish Government’s unwavering commitment to delivering it, and I trust that members will look forward to engaging with the draft plan in due course.

With its report, the Economy and Fair Work Committee has carried out an essential role in providing scrutiny of all those many efforts. I look forward to discussing the committee’s recommendations and the Scottish Government’s actions in more detail, and whether further steps might be necessary in the interest of working across Parliament on a topic in which we all have a shared interest.

We are certainly under no illusions about the scale of the challenge. As we know only too well from our industrial history, poorly managed rapid transformations cause long-term damage to our society. We are absolutely determined not to repeat those mistakes of the past.

I hope that the member will forgive me, but I have to make progress. Perhaps later on.

There are long-term plans to support long-term outcomes. We have started the journey and must continually refine and develop our approach.

This work sits alongside a wide range of related work, such as our green industrial strategy, which was published last month, and substantial investments, including the just transition fund, offshore wind investment, the energy transition fund and Scotland’s heat network fund.

On the north-east and Moray specifically, I have noted the committee’s recommendations and make it clear that we remain committed to supporting just transition in the region through our fund. We are currently commissioning an independent evaluation of the fund’s impact, but it has already provided hundreds of fully funded training courses and direct investment into 26 supply chain companies in the region, estimated to create more than 1,200 new green jobs in the process. That evaluation will help to inform how funding can be further developed to best serve the needs of the region’s businesses, workers and communities.

We are also providing targeted support to the area through the £125 million Aberdeen city region deal and the £32.5 million Moray growth deal, as well as through the energy transition fund, thereby protecting existing jobs, skills and knowledge while supporting new job creation in the region and across Scotland. However, public funding alone cannot finance the region’s transition, and it is critical that we work closely with the private sector to realise our ambitions. The just transition fund has already directly unlocked a minimum of £10 million of private sector investment, and the £25 million of funding that has been allocated to the Scottish National Investment Bank has helped to leverage around £40 million of additional spend.

It is clear from the committee’s inquiries that both Grangemouth and the north-east are critical regions in Scotland’s energy system and wider economy today. It follows that they should have a critical role to play in the transition to net zero. The Scottish Government is committed to fairly managing the significant structural changes that can be expected to take place, and to support the workers and communities who are critical to the journey that lies ahead.

Although heat networks are devolved to the Scottish Parliament, consumer protection remains a reserved matter and, therefore, we are reliant on the UK Government enacting the consumer protection provisions that are contained in the Energy Act 2023. We await the new UK Government’s next steps on that. The Scottish Government continues to work closely with the UK and Welsh Governments and Ofgem on the implementation of consumer standards, and is participating in a quadripartite group that is overseeing the implementation of the legislation.

The member would not expect me to pre-empt any announcement about what might be in future legislation in any detail. However, we are continuing to implement the Heat Networks (Scotland) Act 2021, and we have passed the Heat Networks (Heat Network Zones and Building Assessment Reports) (Scotland) Regulations 2023, which will help local authorities and the Scottish Government to identify opportunities for heat network developments across Scotland. We will shortly consult on proposals to introduce a proportionate licensing and consenting system for Scotland, which I hope will address some of the issues that the member raises.

This year’s programme for government committed to the introduction of a heat in buildings bill, which will be accompanied by a financial memorandum and all other relevant impact assessments. We intend that to be deliverable and affordable for households and businesses. We continue to offer the most generous package of funding in the United Kingdom for households to transition to clean heating, with various schemes to support those who have difficulty in paying their fuel bills. However, we also need action from the new UK Government to rebalance gas and electricity prices, which is an essential part of making the transition more affordable.

In Scotland, we are creating the right conditions to realise the opportunities that the just transition to net zero presents for our workers and for our economy. Our “Green Industrial Strategy”, which was published earlier this month, sets out how we are creating an environment that encourages such investment, including in hydrogen. As the member suggests, we are limited in the fiscal levers that we are able to deploy to support those ambitions in Scotland, and we would absolutely welcome further investment by the UK Government.