An energy giant has shelved plans to drill for unconventional gas under the Firth of Forth and will shift its focus to projects outside Scotland.
Cluff Natural Resources had intended to create the UK’s first deep offshore underground coal gasification (UCG) plant at Kincardine in Fife.
The company, which holds nine UCG licences across Scotland, England and Wales, claimed the £250 million scheme could generate £603m for the economy and create 1,000 jobs.
But now it has announced all spending on the project has been halted, blaming a Scottish Government moratorium on the technology.
Cluff holds three licences to explore for UCG in the Forth estuary, covering large areas around Kincardine and Largo Bay.
But development was stalled in October when Scottish ministers imposed a freeze on the technique over environmental concerns.
Protesters feared Fife would be used as a testing ground for the largely untried process, which involves drilling into a coal seam below the seabed, flushing it with oxygen and setting it on fire. They have warned of catastrophic consequences if toxic gases leak into Fife’s rising mine water.
A petition calling for a ban on UCG in Scotland attracted around 8,000 signatures.
The moratorium came on top of an existing suspension of onshore unconventional oil and gas extraction, including fracking. Campaigners hope it will lead to an outright ban.
In a statement, Cluff said: “While the company is confident that the evidence in relation to UCG will result in the moratorium being lifted, it has stopped all expenditure related to the Kincardine project and is now focusing its attention outside of Scotland, in particular the north-east of England, where the company believes the political situation is more favourable with regards to UCG and considerable support exists for investment in energy and industry with a view to regeneration.”
Environmentalists have welcomed the latest move, describing it as a “massive victory” for those who have fought against the proposals north of the Border.
“Communities around the Forth will be celebrating the news that Cluff has put all work on hold on its flagship underground coal gasification scheme at Kincardine,” said Dr Richard Dixon, director of Friends of the Earth Scotland.
“Cluff’s change of priorities is a major tribute to all those who have campaigned against their plans for a dangerous experiment.
“Sadly, what is good news for Scotland is bad news for England, where Cluff will now more actively try to develop UCG schemes.”
WWF Scotland director Lang Banks said: “This news represents a massive victory for all those who have campaigned long and hard to halt Cluff’s daft coal-burning plans.
He added: “The science is clear – to protect our climate the vast majority of fossil fuel reserves must remain unburned.”
A spokesman for the Scottish Government said ministers had adopted “a cautious, evidence-based approach” to UCG, and the moratorium would allow time for “full and careful consideration of the potential impacts of this new technology”.