How the SNP aims to finally woo oil and gas sector with 'pragmatic' green industrial strategy

SNP ministers have won the backing of oil and gas chiefs for their “pragmatic approach” to their green industrial strategy - with the blueprint a further suggestion the Scottish Government is seeking a warmer relationship with the North Sea. 

But the government has received criticism for drawing up an “outdated” strategy - amid a warning the blueprint will not tackle the biggest challenges facing Scotland’s economy. 

Read more: SNP the ones now squandering Scotland's energy wealth amid desperate budget

Business leaders have raised fears the vision may not reassure jitters that Scotland risks seeing supply chain manufacturing for green technology being lost overseas - but oil and gas chiefs have welcomed a move away from the more extreme vision from Nicola Sturgeon and Humza Yousaf around “opportunities to deliver a UK homegrown energy transition”.

The strategy sets out five priority areas - maximising the wind economy, growing the hydrogen sector, developing carbon capture technology, supporting  green economy professional and financial services and attracting clean energy intensive industries such as data centres.

Kate Forbes | Getty Images

The Scottish Government has pointed to specific actions including hosting a global offshore wind investment forum next spring, developing hubs of hydrogen production and working with public and private partners to drive investment in key projects.

In a further signal that John Swinney’s government is beginning to win over the North Sea oil and gas sector, the industry body, Offshore Energies UK (OEUK) has welcomed the initial vision, despite businesses still awaiting the much-delayed energy strategy, due to be published imminently, that will chart the SNP’s updated position on the oil and gas sector.

David Whitehouse, OEUK’s chief executive, said: "We will take time to discuss this strategy with our members, but early signs are that this is a pragmatic approach adopted by the Scottish Government’s green industrial strategy, which recognises that the opportunities to deliver a UK homegrown energy transition are huge.

“The offshore energies industry supports the acceleration of renewable energies and welcomes the strategy’s focus on maximising Scotland’s wind economy, developing a self-sustaining carbon capture and storage and growing the hydrogen sector. These will build on our oil and gas expertise and world-class capabilities, which are vital to delivering this energy transition successfully.”

Scotland’s oil and gas sector is still awaiting the Scottish Government’s energy strategy. Picture: Andrew Milligan/PA Wire | Andrew Milligan/PA Wire

He added: “The strategy prioritises a competitive fiscal environment and regulatory certainty which are key to attracting and facilitating the investment required to deliver net zero. 

“This is vital if we are to harness the potential of our world-leading supply chain and our skilled workforce to achieve this and it's good to see that the Scottish Government is committed to ensuring capacity is retained and developed with this goal in mind.

"We expect more detail to be published in the Scottish Government's forthcoming energy strategy."

Liz Cameron, chief executive of Scottish Chambers of Commerce, warned that “how the strategy interacts with the delayed energy and just transition plan will be crucial to help business understand how the government sees these two critical policy strands align”, along with “how Scotland’s vital oil and gas sector will be supported to play its part on the path to net zero”.

She added: “This is a once in a generation opportunity to make the most out of Scotland’s green potential. 

“Business stands ready to work with the Scottish Government and other partners such as agency bodies and the UK Government, to make these ambitions a reality.”

But SNP ministers are facing criticism for failing to reassure the renewables sector that plans are in place to ensure wind turbine manufacturing, promised to take place in Scotland, are not lost overseas.

The Scotsman previously reported that up to £16 billion of manufacturing investment as part of the ScotWind contracts, promised to stay in Scotland, could be lost overseas due to a lack of facilities and capacity.

Andrew McRae, the Federation of Small Businesses Scotland’s policy chairman, said it was “important we don’t miss the wider supply chain opportunities” green industries will provide.

He added: “Many are ready to diversify and grow by grabbing the opportunities offered by the transition. Taking steps to ensure these opportunities flow out to the wider supply chain will surely pay dividends.”

Roz Foyer, general secretary of the STUC (Image: Andrew Milligan/Press Association)

STUC general secretary, Roz Foyer, warned the document was “yet another example of government strategy that talks up potential without matching it with the necessary policy”. 

She added: “After two decades, the Scottish Government should know that ambition without concrete action to build green industries and create jobs across our communities is worthless.

“This approach to industrial strategy is outdated and has been abandoned by the USA and across the EU.” 

Writing in today’s Scotsman, Deputy First Minister and Economy Secretary, Kate Forbes, said the strategy’s top priorities are where “Scotland’s greatest strengths lie and our work will be most effective”.

She said: “Scotland already has a head start in making the most of the move to net zero for the benefit of its people and communities. Now we must capitalise on the economic impact of that transition.

“To do that, we will partner with public institutions, business, industry, unions, investors and academia. By prioritising resources and investment to create an environment for growth, and by coordinating policy.

“The green industrial strategy sets out how we will use the policy levers available to us to support growth and investment. It is a clear statement of direction, focus, and intent. It outlines how we will remove barriers, create incentives and provide support wherever we can.”

In an apparent move away from the Greens and the Scottish Government’s strategy under the Bute House Agreement, Greens co-leader Lorna Slater warned the vision “sets a worrying direction for Scotland and could actively damage our chances of reaching net zero”. 

She added: “The scale of the crisis we face demands bold and transformative action, but this strategy comes nowhere near to offering that.

“They are making the wrong choices. These are experimental technologies, any role that they have to play in our journey to net-zero will be very limited in both time and scope, and they’re a long way yet from being truly green technologies.”