Chamber and committees

The Acorn project, which the member referred to, is not only vital in supporting decarbonisation in Scotland; as the member has made clear, it is an opportunity for new industry, as has been outlined in project willow, among many other places. Business leaders including Sir Ian Wood have made it very clear that any further delays to Acorn would have serious economic consequences for Scotland.

The UK Government has, it must be said, acted swiftly south of the border, and it is now vital that it takes action to support Acorn and avoid a cliff edge of job losses in Scotland. It must also provide a full funding package and timeline for the Acorn project in next week’s comprehensive spending review.

On the member’s other points about the billions of pounds that will be added to the Scottish and UK economies if we get the transition right, I can only concur.

The member is right to point to the areas that are within our responsibility, which we take seriously. Not least, he has mentioned our involvement in the skills passport, the aim of which is to be a free-to-use tool, which addresses his point about the need to ensure accessibility. The Scottish Government has previously provided £3.7 million of funding from the just transition fund to support industry-led development of an energy skills passport—as the member is right to mention. We will continue to work with the UK Government and industry to develop that.

All those concerned—including, as far as I can see, the Climate Change Committee—acknowledge that carbon capture, utilisation and storage is essential to meeting the net zero aim that we all have for Scotland. I do not want to point too much to the negative scenario that the member outlines, although he is right to outline the risks. However, if we are to find alternative industries in Grangemouth and the member’s part of Scotland in the future, and if we are to develop the infrastructure that is needed for carbon capture, utilisation and storage, decisions at UK Government level are needed. I do not say that to make a political point, but they are simply needed. The decisions have been made elsewhere in the UK, and it is time for them to be made regarding Scotland now.

Aberdeen and the north-east have been an energy powerhouse for 50 years. As we transition from the boom years of oil and gas towards the renewables revolution that is on the horizon, I think that all of us in Parliament can acknowledge the opportunities that a just transition can now bring.

At the heart of that transition is our oil and gas workforce—experienced, highly skilled workers who are passionate about their work and their industry. Those workers are the latest in a long line of people who have had opportunities to provide for their families, experience work overseas and build a modern, successful city in Aberdeen through the oil and gas industry. Beyond anything else, a just transition must exist primarily for them. It must ensure that they have good, well-paid jobs, so that they can thrive in the region and be proud to live and work there.

This statement has been prompted by the publication of the Just Transition Commission’s report into Aberdeen and the north-east. I thank the commission for its work, especially in travelling around the country and speaking to those who are directly impacted by the transition to net zero. However, it would be remiss of me not to acknowledge that the report follows on from a concerning series of announcements that affect jobs in the region, especially in the oil and gas industry.

As members know, most of the key policy levers for the North Sea oil and gas sector, including decisions on licensing, consenting and the associated fiscal regime, are matters that are reserved to the United Kingdom Government, so it is not surprising that much of the report is addressed to that Government.

The UK Government has recently concluded several periods of consultation on key aspects of the future of the North Sea. We, along with industry, workers and other stakeholders, are awaiting its next steps. Those steps will be of vital importance for all aspects of the energy transition, including the workforce.

We are content to accept in principle the headline recommendations in the commission’s report. However, as the commission recognises, clarity on the direction of travel from the UK Government will be vital before we can undertake some of the planning that the sector needs. That is not a process that the Scottish Government can do alone. In order to support workers and create an improved environment for investors, the UK Government needs urgently to provide stability and certainty in several key reserved areas.

First, the UK Government holds the powers to act in areas of taxation for the North Sea oil and gas sector. We therefore continue to call on it to listen carefully to concerns that are being expressed by businesses about the impacts of its energy profits levy. The energy profits levy was always supposed to be a temporary measure, and we must see an end date for it, as it is now affecting investment and jobs in the north-east.

Given that we are now seeing adverse effects of that policy, the UK Government should be considering when the earliest possible end date could be in order to avoid more decisions such as the one that we saw from Harbour Energy last month. The UK Government must urgently work with industry through its recent consultation, which closed on 28 May, and more widely, to set out a stable long-term fiscal regime for the North Sea. The aim must be to give the offshore energy sector much-needed certainty and to treat it fairly alongside other parts of the UK economy.

Secondly, on decisions on the licensing and consenting of North Sea oil and gas projects, which are, of course, also reserved to the UK Government, we continue to call on it to approach those decisions on a rigorously evidence-led and case-by-case basis, with climate compatibility and energy security as key considerations. The UK Government needs to bring forward its finalised positions from recent consultations on the future regulatory regimes as soon as possible to provide businesses and workers with much-needed certainty and stability.

Thirdly, it is essential that the UK Government provides clarity and certainty for the Acorn project in the upcoming spending review. A positive final decision on Acorn and the Scottish cluster, including announcing a full funding package and a clear timeline to achieve a final investment decision, is required so that investors can continue their work in developing that vital project. We stand ready to work constructively with the UK Government and to increase our funding for Acorn. If the UK Government commits, we will work with it and industry to ensure the fastest possible deployment of the Acorn project and the Scottish cluster, so that a just transition for our energy workforce can be secured.

Although clarity from the UK Government is needed in the key areas that I have mentioned, that will not stop us taking the actions that are possible within our devolved competence. Our £500 million just transition fund for the north-east and Moray is currently open for new applications, with £8.5 million of new funding available this year. I once again call on the UK Government to match our investment in that area. In the next session of Parliament, we will meet the remaining commitment for the fund and work with partners to deliver strategic investment in the region.

As part of the fund, we have been prioritising skills investments through the industry-led offshore energy skills passport and the energy transition skills hub. We have also supported key projects in the region through our energy transition fund and we are currently working with the UK Government to develop a new regional skills pilot scheme for Aberdeen City and Aberdeenshire. The expansion of offshore wind represents a significant opportunity to create thousands of high-quality jobs, offering opportunities for those who are entering the job market for the first time and for those who want or need to change careers, including as part of a just transition.

We are investing up to £500 million over five years to support market certainty, to create a highly productive and competitive offshore wind economy and to support thousands of jobs. We are providing funding to colleges in 2025-26 to establish an offshore wind skills programme, helping to create region-specific training hubs for offshore wind skills, and we have convened a short-life working group with industry and public sector partners to develop and deliver an evidence-based offshore wind skills action plan at pace.

That activity by the Scottish Government could be even more impactful with the appropriate UK Government actions that I have mentioned. To secure project delivery in Scotland, as well as investor and supply chain confidence, the UK Government must prioritise the critical reforms that are necessary to improve the contracts for difference scheme, make transmission charges fairer and bring forward grid connection dates.

At this end—the Scottish Government end—we are increasing the impact of the UK Government investment that is being provided. The north-east investment zone will unlock a funding package of up to £160 million from the UK Government over 10 years to invest in a range of interventions that are designed to attract investment, boost innovation and create jobs. The Scottish Government will also provide a package of non-domestic rates retention at the sites, which the regional economic partnership can use to further investment in the zone and associated economic infrastructure.

In addition to all that, the Scottish and UK Governments have worked together on the Aberdeen city region deal, on initiatives such as the offshore energy skills passport and now on the investment zones.

We know that joint working will be essential in order to unlock the potential of the north-east and the city of Aberdeen during the transition. As I said at the beginning, we can all acknowledge the opportunities that can be unlocked through a just transition, and the Scottish Government will continue to take forward efforts in the areas that are in our power as we await clarity from the UK Government on its next steps.

I look forward to contributions from members and their matched support for our calls on the UK Government as we express our collective commitment to the industry and workforce that has made Aberdeen and the north-east so economically important to our country.

First, the member is quite right to point to the fact that economic growth and the decarbonisation of our economy go hand in hand. We are committed to achieving net zero by 2045, and we are proud of our record of climate action to date.

Any further decisions in this area have to be got right, and have to be the product—as I have mentioned many times—of co-operation between Governments. That is why we continue to call on the UK Government to approach decisions on, for instance, the North Sea oil and gas projects case by case, led by rigorous evidence.

A truly just transition will involve building on our strengths as an energy powerhouse, utilising—as I have mentioned many times—our skilled workforce. There are real economic opportunities around net zero and, as I have said, our record in Scotland is one of marrying up our aims on the environment with real economic growth.

The member is right to say that communities must be involved in the planning of those matters. That is one of the reasons why the Scottish Government is committed to initiatives around the environment within communities.

The point that has been made about planning for skills is clearly important, too. In the programme for government for 2025-26, the First Minister reaffirmed that point, committing to

“Introducing a new Scottish Government-led approach to national skills planning, and strengthen regional skills planning, to ensure that post school provision”

is aligned with and

“responsive to Scotland’s strategic skills needs”

in this area.

As Douglas Ross is well aware, we supported the levy as a temporary measure. We do not support the increase in the levy to its current rate, and we do not support the fact that the UK Government appears to have put no end date on it.

I could begin by saying that many of the plans that have been referred to exist in draft form. I could talk about the fact that some of the plans are dependent on court decisions at UK level. However, more relevantly, I will respond to the real and significant points that Douglas Lumsden raised about the challenges that the north-east of Scotland and his constituents face.

Douglas Lumsden mentioned the idea that the challenges that the industry faces are somehow the consequence of being demonised by Government policy. I have to push back very strongly against that, and I merely point to the fact that the north-east of Scotland faces real challenges, as he and I both acknowledge, due to the maturing of the North Sea basin and the changes that will come regardless of Government policy. All Governments—the Scottish Government and the UK Government—have to prepare for that and are devoting real resources, as I have set out today.

The member will not be too surprised to know that I do not accept every premise of that question—[Interruption.]

As I just said, some areas are within our responsibility, but some are matters for conversation between the two Governments and some are plainly reserved to the UK Government—the member is only too keen on that fact—and we must get adequate or helpful decisions from the UK Government on everything from the Acorn project to licensing and all manner of areas that are within the UK Government’s responsibility—[Interruption.]