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Chamber and committees

Official Report: search what was said in Parliament

The Official Report is a written record of public meetings of the Parliament and committees.  

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Dates of parliamentary sessions
  1. Session 1: 12 May 1999 to 31 March 2003
  2. Session 2: 7 May 2003 to 2 April 2007
  3. Session 3: 9 May 2007 to 22 March 2011
  4. Session 4: 11 May 2011 to 23 March 2016
  5. Session 5: 12 May 2016 to 5 May 2021
  6. Current session: 12 May 2021 to 16 May 2025
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Displaying 3061 contributions

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Net Zero, Energy and Transport Committee

Subordinate Legislation

Meeting date: 27 February 2024

Gillian Martin

Yes. The most important thing is that we provide certainty. As I outlined in my opening remarks, we want to work in tandem with the UK Government to provide that certainty and also to do joint consultation.

There is concern that, if we do not make the exemption for energy intensive industries, particularly in the high fuel price situation that we have at the moment, they could find that they are not profitable any more and they may have to consider things such as job losses—that is everything that we want to avoid. The large manufacturing sector is particularly affected—it obviously consumes a great deal of energy—so the policy protects them to a certain extent and protects those jobs. [Gillian Martin has corrected this contribution. See end of report.]

Net Zero, Energy and Transport Committee

Subordinate Legislation

Meeting date: 27 February 2024

Gillian Martin

There are about 43 in Scotland.

Net Zero, Energy and Transport Committee

Subordinate Legislation

Meeting date: 27 February 2024

Gillian Martin

Obviously, everything around the decarbonisation of energy is devolved to Scotland and our economic department is looking particularly at high-energy sectors such as manufacturing.

I am not sure that this particular instrument is about incentivising anything. I think it is about protecting jobs. We have large manufacturing, such as food production and feed-stock production. The original point behind the renewables obligation was to get a subsidy for renewables, but this particular exemption is about large manufacturers that are particularly affected by inflation and high fuel costs. There are thousands of jobs associated with those manufacturers and this is about protecting them in the face of a number of pressures. [Gillian Martin has corrected this contribution. See end of report.]

Net Zero, Energy and Transport Committee

Subordinate Legislation

Meeting date: 27 February 2024

Gillian Martin

The solutions to that lie in other schemes and all the work that we are doing with various sectors. There are obviously incentives for decarbonisation in the business support and procurement landscape in Scotland. We are working on a green industrial strategy and there will also be incentives in that. There is incentivisation across the piece of what the Scottish Government puts forward, particularly with our enterprise agencies.

This particular instrument, to my mind and my interpretation, is about keeping the manufacturing and energy intensive industries going and taking away one of the pressures on them, particularly given the global landscape of fluctuating energy prices that at the moment are outwith our control. As we look to the future and have more renewable electricity, in particular, in Scotland, those pressures will decrease.

Net Zero, Energy and Transport Committee

Subordinate Legislation

Meeting date: 27 February 2024

Gillian Martin

No, I will not take that chance. I think that I have said everything that I need to say. Thank you.

Net Zero, Energy and Transport Committee

Correction

Meeting date: 27 February 2024

Gillian Martin

 

Gillian Martin has identified errors in her contribution and provided the following corrections.

 

At col 3, paragraph 6—

Original text—

There is concern that, if we do not make the exemption for energy intensive industries, particularly in the high fuel price situation that we have at the moment

Corrected text—

There is concern that, if we do not make the exemption for energy intensive industries, particularly in the high electricity price situation that we have at the moment

At col 4, paragraph 1—

Original text—

That will amount to quite a substantial sum if you think about the huge amount of fuel that is used by those particular industries.

Corrected text—

That will amount to quite a substantial sum if you think about the huge amount of electricity that is used by those particular industries.

At col 5, paragraph 1—

Original text—

but this particular exemption is about large manufacturers that are particularly affected by inflation and high fuel costs

Corrected text—

but this particular exemption is about large manufacturers that are particularly affected by inflation and high electricity costs

 

Net Zero, Energy and Transport Committee

Subordinate Legislation

Meeting date: 27 February 2024

Gillian Martin

I have some figures here.

I will mention domestic fuel bills, because obviously the exemption is recouped. The measure will have very little impact on domestic fuel bills.

I will have a look for the figures.

Net Zero, Energy and Transport Committee

Subordinate Legislation

Meeting date: 27 February 2024

Gillian Martin

I will need to check my notes on that, Ms Boyack. I do not think that I have that information to hand. Obviously, you are making a decision today. If we can find that information we will provide it to the committee.

Net Zero, Energy and Transport Committee

Subordinate Legislation

Meeting date: 27 February 2024

Gillian Martin

The industries that are involved have already been set and the amendment will not allow any others to come into the scheme. They are already agreed and set. The exemption was 85 per cent and it will now be 100 per cent. We have seen in the last couple of years that particular energy intensive industries have found it quite difficult to keep employing people and to keep operations from losing money.

Net Zero, Energy and Transport Committee

Subordinate Legislation

Meeting date: 27 February 2024

Gillian Martin

It adds a very small amount. It is important to mention, Mr Lumsden, that this will be across the UK. Households typically account for about 40 per cent of renewables obligation costs recovered by suppliers. The average cost is currently about £77.50 per year on an electricity bill. The exemption is likely to cost just an extra pound or two.

We do not want a situation where household bills are affected by things like that, but I think the reason behind this is that there is an awful lot more at stake if we do not have an exemption. The particular sectors that are affected by this employ a large number of people, not just in Scotland but throughout the UK, particularly in manufacturing.

The UK Government has decided to increase the exemption to 100 per cent. It has historically been the case that the Scottish Government has not gone on a different path and we too want to stay on the path and have agreed to act alongside the UK Government.

Also, we do not want carbon leakage. If we have a landscape in the UK or Scotland where it is increasingly unprofitable for those industries to exist, the chances are that they will go elsewhere. It will be not just carbon leakage but economic leakage. This is a way in which we can protect those industries from their overheads being so onerous that they might have to think about taking their operations elsewhere.