Scottish First Minister Humza Yusuf opened the All-Energy conference in Glasgow this morning by laying out the Scottish government’s commitments to net zero, saying that creating a just economic transition was a “moral imperative”.
Yusuf said that on taking power as First Minister six weeks ago, he had made it clear what his government’s key priorities would be. The first was to tackle poverty, in particular child poverty, Yusuf said that “seizing the opportunities presented by a just transition can undoubtedly help with tackling poverty”, as well as the other mission of investing in public services.
“I’ve never felt there was a conflict between trying to tackle poverty, being progressive in our policies, and at the same time ensuring we grow our economy, increase that tax base, revenue base and reinvest those profits into our public services. There can be no growth without unlocking the potential of the green economy,” Yusuf said.
The First Minister talked about the potential of Scotland to create green economic resources and transition away from a reliance on the oil and gas sector, especially in the North East. Economic change can create uncertainty, and Yusuf said he did not want the end of the oil era to replicate the failures of the end of the mining industry.
“There’s a reason we call it a just transition. There’s nothing just or progressive about throwing workers on the scrap heap,” Yusuf said. ”Ensuring we have a skills academy to shift from fossil fuels to the green economy is work that we fully support in its entirety,” he added.
Yusuf said the government was committed to a partnership with the private sector to drive change towards a green economy, and that despite his differences with the UK government, “we of course have much in common. I believe that if we work together, we can truly unlock and unleash that potential which is in the best interest of Scotland and the whole of the UK.”
Yusuf said he had already had two conversations with Prime Minister Rishi Sunak where unlocking and unleashing the green energy potential of Scotland was a “key topic”. He said he hoped the UK government would work with him to “address the flaws in the current transmission network, the charging system. The current methodology after all charges offshore wind generators while gas generators in the rest of the UK receive network credit. It doesn’t properly support our renewable sector”.
Yusuf said the UK government could also announce a timetable for the Acorn Carbon Capture, Utilisation and Storage (CCUS) scheme, “so that we can take full advantage of Scotland’s existing oil and gas infrastructure to adopt technology which will be essential in meeting those ambitious net zero targets in Scotland in relation to 2030 and 2045.”
The Scottish government was investing £500 million in a just transition fund for Scotland, Yusuf said, and he argued that the UK government should match this funding to recognise the long term benefit to the UK of North Sea oil and gas. Although the UK couldn’t match the scale of the US Inflation Reduction Act (IRA), Yusuf said, the UK should have a strategy for incentivising green investment.
“The scale, the pace of what we have to do has to increase with urgency given the threat of the climate emergency we are currently facing,” Yusuf said. “It’s not simply the reduction in our emissions targets we have to see, we have to ensure that we as a government are investing alongside our partners, sharing some of the risk with our partners to make the most of the green job opportunities that exist.”
In relation to offshore wind, installed capacity has increased to 2.2GW in the past five years in Scotland, Yusuf said, or 1/6th of Scotland’s electricity needs. However, planned offshore wind capacity is 40GW or more, Yusuf said. He mentioned the recent investment by Japanese company Sumitomo in a factory in the Highlands to make high-voltage undersea cables.
Scottish developers have commitments which could see £28 billion of supply chain work come to Scotland, Yusuf said. “However, we need to make sure these potential benefits become reality. That’s why at last year’s conference my predecessor announced the establishment of a collaborative chapter which was signed by 24 of the Scottish developers.” This was an example of the Scottish government’s ability to collaborate with offshore wind developers, Yusuf said.
Yusuf next turned to hydrogen, one of the All-Energy conference’s key themes this year. “Developing a hydrogen sector in Scotland won’t simply help us to decarbonise transport, it can also become a major source of exports. Scotland, I believe, has the unique opportunity to collaborate with our friends, our neighbours in Europe, who given the particular geopolitical circumstances are desperate to diversify their energy sources.”
Yusuf said that when he met with ambassadors from five European countries recently, energy security and diversification was “the hot topic, the number one issue they all wanted to talk about… That’s why we’ve committed £100 million over the rest of this parliamentary session to support the green hydrogen sector. Part of that funding has been allocated to the Hydrogen Innovation Scheme. That supports those feasibility studies, technical demonstrations, testing facilities so important for new ideas to be tested and scaled up in future.”
“We are confirming today that through this scheme, grants worth a total of £7 million have been allocated to 32 different projects. Those projects cover a wide range of different areas, such as how to produce and store hydrogen on floating wind farms, how to decarbonise agriculture and forestry works in rural areas as well,” Yusuf said.
Yusuf concluded by reflecting on his recent visit to Aberdeen, where he visited a £400 million harbour expansion project partly supported by the Scottish National Investment Bank. “The expansion will help the harbour to continue serving the oil and gas industry,” Yusuf said, “including by playing a significant role in the decommissioning of oil rigs, while also supporting our offshore wind sector.”
“There we have the two opportunities, to continue to support the oil and gas sector who are crucial partners in that just transition to net zero, while making sure through our investment in the harbour, capturing the opportunity in relation to renewables and our journey towards net zero. The project provides physical evidence of how a city which has been the oil and gas capital of Europe is transforming itself into the net zero capital of the world,” Yusuf said.
Decarbonisation at scale is a huge challenge, but one that the First Minister said he and his government was absolutely committed to. “As well as being First Minister, my most important job is that of a father. I want to leave this planet in a much better state than it currently is. I want to ensure there is a sustainable future for my children and their children to come.”
“So we are committed to that just transition not just as a government policy, but frankly as a moral imperative,” Yusuf concluded.