Chamber and committees

I assure the committee that, among those projects—I am happy to make sure that this is all copied to the committee—there are some community projects, as well as business projects and big projects. It is about trying to balance being transformational with ensuring that there is change at a community level and that we have bottom-up projects. I absolutely understand that.

Those are good questions. Indeed, we touched briefly on the issue earlier, and I am determined in 2024 to try to ensure that we move forward on it. The first couple of years were focused on getting the fund up and running. If we had waited to answer some of those questions, we would rightly have been criticised for not getting the fund up and running and for taking a couple of years to sort out the processes behind the scenes. There are, of course, processes in place, but we understand that we have to show how everything is measured.

The objectives of the fund are to support the strengthening of the economy in north-east Scotland and Moray, to decarbonise and to deliver the principles of the just transition, which we have already discussed. We want the projects and how the funding is used to be co-designed, and we want a bottom-up approach in the region. That has been happening.

The just transition is about creating good green jobs as well as strengthening communities, and there is a variety of projects in that respect. I am trying to remember the name of that film—is it “Everything Everywhere All at Once”? Some people I speak to see the fund like that—that is, that it should deliver everything. You can take any subject and, perhaps, put it under the remit of the just transition fund. Of course, we have had to filter things out and make sure that the projects that are coming forward are discussed with the local enterprise companies and the local authorities. We then take a decision on what are the best projects to deliver the broad objectives of the just transition fund.

I thank Colin Smyth for the question; it is a very important issue. The Scottish Government takes the development of a skills passport very seriously, and, of course, there is cross-party support for it in the Parliament as it will make it easier for people working in, for instance, the oil and gas sector to transfer their skills and employment into the renewable energy sector and other green technologies.

Progress is being made. A few weeks ago, I had a catch-up meeting with some of the stakeholders on the working group that is dealing with it, and the Scottish Government gave the working group a deadline of the end of March to get it concluded.

A lot of work is being done. Stakeholders will meet in the next week or two. Aligning standards among the various sectors that are involved has been a big task, particularly between the renewables sector and the oil and gas sector in this case. Standards and training requirements have to be aligned. Some areas have clearly taken a lot longer to be ironed out than we would have hoped, but I am hopeful that we will have a conclusion by the end of March.

It is the deadline for the working group to give us the solution. It is working on it now to enable us to introduce the passport. We are asking the group to come back to us with the final version of the digital passport.

The skills issue and ensuring that people can transfer their skills into different sectors as smoothly as possible is at the heart of the just transition. A lot of work is under way. Skills Development Scotland has been doing a lot of work on apprenticeships in green industries, and good progress is being made with that. A number of initiatives in north-east Scotland that also address the issue are being funded through the just transition fund. We also expect companies to play a role in funding training for their workforces, which is always the case and certainly should be so for the just transition.

I assure Colin Smyth that we are actively looking at a lot of this. We have our commitment to refresh the climate emergency skills action plan and the work that flows out of that, and we are looking at how it joins up with the rest of the skills issues in this space.

The James Withers report has energy transition and net zero at the core of its recommendations on how we change the landscape for skills and training in Scotland. That is all being looked at and is very active.

Attracting green investment for the world’s move towards net zero is a massive issue in Scotland, as well as a global issue, and we need to realise the energy potential of offshore wind and other technologies to create the jobs that we want to see in the future. Activity is under way to attract more capital investment to Scotland; we have a capital investment plan. The First Minister’s recent panel has also reported on how to attract international investment to Scotland to fund net zero, and the Government is considering its recommendations to see what we can do to deliver them. In the past few months and years, there has been a lot of activity in that space among the private capital markets and players, as well as in the public sector and Scottish Government initiatives.

On the challenges, I go back to my previous answer. Obviously, we are in a time of high interest rates, and we have seen some economic instability at the UK level in the past year or two, which does not help that stable environment. I am also the minister for trade and, when I speak to inward investors from around the world, they are full of praise for Scotland. I am not just saying that because I want to sit here as a minister and say good things. It is eye-opening to hear what people outside Scotland say about Scotland. We do not hear enough of that, because we hear a lot of negativity in our own country. When I speak to companies overseas, they are very positive about Scotland. They tell me that they are attracted to investing in Scotland and our energy transition in particular—not just that technology but lots of other sectors—because they have seen that Scotland has a stable, long-term and committed net zero policy. The Government has been in power since 2007, and that has helped greatly because we have been able to make such a long-term commitment. That is what I hear from international investors, and it will deliver a lot of dividends for Scotland.

I should have addressed that point in my earlier answer to your question about challenges; it is a very important point. Ensuring that the grid can deliver is clearly a massive challenge. In order to deliver the just transition, we need projects to be up and running. That will deliver the jobs, the activity and the revenues, but in order to get those big projects up and running we need access to the grid. That, of course, is one of the biggest challenges.

My colleagues Gillian Martin, the Minister for Energy and the Environment, Neil Gray, the Cabinet Secretary for Wellbeing Economy, Fair Work and Energy and others have been doing a lot of work on that as part of the development of the energy policy. The final strategy will be delivered and published by the summer. National Grid has been adapting its policies, and a lot of initiatives are now under way to prioritise renewable energy developments.

You have raised a very important point, and I am happy to write to the committee about that. I am not the minister who is dealing directly with National Grid on the issue, but there has been a lot of activity in the past 12 months.

Thank you very much, convener. Good morning, committee. I thank all of you for the opportunity to speak to the committee today.

From my perspective, the committee’s inquiry into the just transition fund for north-east Scotland and Moray comes at a really good time, because I am keen to reflect this year on the fund’s first two or three years and our approach to a wider just transition, which, of course, continues to evolve. That is a living, breathing concept. There is no blueprint for it, given that no country has done it before, so I am very keen to have your feedback today, and I look forward to the outcomes of your inquiry.

At the heart of the Government’s desire for a just transition in Scotland is the fact that we do not want to repeat any of the mistakes from Scotland’s past. We are all aware that we continue to feel the impact of the rapid decline that was inflicted on many of our heavy industries, particularly in the 1980s. Obviously, the closure of the coal mines is the example that is often cited as part of that debate.

For me, a just transition is about ensuring that the positive impacts of reaching net zero are felt throughout our economy and the whole of society, and that they bring tangible benefits to all our citizens, especially with regard to jobs and skills, affordability and living standards. Supporting positive outcomes for communities, places, workers and businesses is fundamental to the just transition approach.

Change is always challenging, of course, but the north-east and Moray have a crucial role to play in our transition to a greener future. We have to harness the area’s skills, talents and expertise in order to support the build-out of our low-carbon technologies and to tackle the existing issues of fuel poverty and energy security, as well as to safeguard a future for the many oil and gas workers and offshore workers we have, particularly in that region of Scotland.

We have, of course, already undertaken a lot of work to create new jobs—in the offshore wind sector, in particular. There is no doubt that the opportunities that are provided by Scotland’s resources are vast and that the region of Scotland that we are talking about is very well placed to take advantage of them. Exciting projects are already under way in the region. Our just transition fund for the north-east and Moray has committed £500 million of investment over 10 years. That recognises the unique circumstances of the transition of our oil and gas sector and its particular concentration in the north-east. We have an urgent responsibility to provide a just transition that protects opportunities for workers and communities, as well as supports and underpins the region’s economy.

Despite the fund being at a relatively early stage, we have already allocated £75 million. That has supported around 24 projects so far, as well as a range of other activities to support commercial investment through the Scottish National Investment Bank. Our funding support is helping to finance organisations, businesses, communities and individuals in transition, creating jobs in low-carbon industries, and supporting the provision of skills in the region.

The first just transition commission stressed the importance of a planned and managed transition to net zero. That is why we have committed to delivering just transition plans for our sectors and regions and, in some cases, individual sites. Good planning is critical to providing certainty for communities, businesses and workers about the changes that will happen and those that are already under way. Accordingly, we have put engagement and co-design at the core of our planning and policy to ensure that the people who will be impacted by the transition have their say. That is, of course, a key principle of the just transition. Without societal buy-in, it will be impossible for us to reach net zero in a fair way.

We are making a lot of progress. There are lots of lessons to learn and, obviously, there is lots more to do in the future.

As I said at the beginning, there is no blueprint for this. Scotland is attracting international attention because of the way in which we are approaching a just transition, but we have to reflect on the first couple of years of the fund in particular, as well as on the overall approach. Therefore, I am keen to get your thoughts, and I will do my best to answer your questions. I will get back to you with anything that I am unable to furnish you with at this meeting.

I look forward to the exchange and to today’s session.

The short answer is yes. We warmly welcome the report from the just transition lab at the University of Aberdeen, which is an innovation in the university in the past year or two. That shows the pace of change. The lab has been created, and I know the academics who work there quite well. I know that the Cabinet Secretary for Transport, Net Zero and Just Transition, Màiri McAllan, who leads on the subject in the Cabinet, was at the university recently and met the lab to discuss that very report. We are keen to take on board its recommendations as part of our thinking going forward this year.

The revenue support for just transition and all these projects has massive on-going financial implications. I do not need to tell the committee how tough things are financially in the public sector and for Governments. Therefore, I do not have an easy answer to that at the moment; all that I can do is to continue to reflect on it. Obviously, the committee refers to that in its inquiry report, and we will use the opportunity to reflect further on it. It is just a financial issue in terms of revenue support. Also, capital is a way to achieve transformation. Capital investments often bring in and unlock private sector investments, so we are getting even more transformational projects through that means. That is why there is a big focus on capital. However, the point is well made.

On interaction with the UK Government, up to £400 billion has been taken out of the North Sea in oil and gas revenues over the past decades. Therefore, we have made the point many times to the UK Government that we believe that it could match the just transition fund for north-east Scotland. We will continue to make that point.