Chamber and committees

First, I do not know much about the Norwegian sector. If what you are saying is true, obviously the order will bring us in line with that. At the moment there is a kind of loophole, in that operators would have to use their ETS allocations to make up for flaring activities, but not for their venting of any CO₂.

It might not stop there, however. We might also look at methane emissions, which might happen in the next couple of years. I am not entirely sure whether the Norwegian sector includes methane as well as CO₂. It would be interesting to see whether it does—I will look into that after the meeting. However, from what you are saying, if your understanding of what the Norwegian sector does is correct, the order will bring us more in line with them.

It is slightly beyond my ken. There was a great emphasis on reducing the amount of flaring—that was the real focus. I would have to look into why venting was missed out, but the order is about correcting that and, as I say, closing that loophole so that we do not have CO₂ emissions being vented and going into the atmosphere that do not need to be.

In fairness to the oil and gas industry, it is working hard to reduce production emissions. The order is therefore helpful, because those who are reducing their production emissions will save money as a result.

Other things are also happening in order to incentivise decarbonisation. For example, there has been a reduction in the amount of free allocations.

In relation to aviation across the UK, for example, we will have no more free allocations after 2026. That has been loudly trumpeted, and people are building up to it. Some of the larger emitters in that area—particularly in aviation, where there is not much danger of carbon leakage—are preparing for the fact that they will not have any free allocations.

It is about a real tightening up and really aligning the ETS with the net zero ambitions and targets of all four nations of the UK.

Effectively, it means that there will be no loophole for getting rid of CO₂. At the moment, if you were to flare off any gas, you would have the ETS to cover that. We do not want a situation in which CO₂ is being vented into the atmosphere, because that essentially has the same effect as flaring. It means that operations will have to be consistent with not venting CO₂. The order is really closing a loophole.

It is my understanding that such venting is not exactly a practice that goes on an awful lot, but the order will remove that loophole in case, as I think that I mentioned in my statement, there is a perverse decision to vent without flaring, to avoid impacting ETS allocations.

I will just move the motion.

I move,

That the Net Zero, Energy and Transport Committee recommends that the Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2024 [draft] be approved.

I do not think that I said that, because I do not have the numbers on how much CO₂ venting is going on in Scotland. I am sorry if I misspoke. I was just saying that the instrument will put the venting of CO₂ on the list of actions that will be part of the ETS.

To come back on your ScotWind comment, ScotWind was designed for four reasons: to decarbonise the electricity that we supply to the whole of the UK; to provide an opportunity for Scotland to have a thriving energy sector; to fund net zero work, which I wish it to do—however, I will not pre-empt anything in the budget—and to encourage investment in Scotland, which it is absolutely doing.

My comments about anything that is done on funding from big emitters apply to the whole UK. That is certainly my view of what should happen. However, it is also my view that ScotWind should address those four aspirations. However, I do not want to pre-empt anything that is said in the budget.

I do not quite see the correlation between the ETS costing businesses money and carbon capture, utilisation and storage not going ahead. However, your mention of the possibility of CCUS not going ahead gives me the opportunity to say that it must go ahead. We must get action on the Acorn project’s track status. The Climate Change Committee has made it clear on many occasions that we will not reach our 2045 net zero target if carbon capture and storage does not happen in Scotland. We would also be missing a massive economic opportunity for Scotland, which might align more to your question.

Now I get you. With regard to a CCUS scheme—we were just talking about oil and gas and particularly about venting—the ability to capture and store carbon will reduce businesses’ costs. If those schemes are not available to the Scottish cluster and all the industries that want to be part of the Scottish cluster, that is a real problem. However, the biggest issue is that we are missing out on a major opportunity to take carbon out of our processes and our atmosphere, which puts 2045 on a bit of a shoogly nail, as the Climate Change Committee has said time and again. Therefore, I will use this opportunity to say that we need track 1 status for the Acorn project as soon as possible.

Only a north-easter could ask such an intricate question, which I am pleased to answer. There are a couple of things in there.

Our position is that there must be a fiscal regime in place that allows the oil and gas industry to support its workforce and be instrumental in the transition to net zero. Quite a lot of oil and gas producers are involved in ScotWind licence options, and they support a vast supply chain. There is a well-rehearsed argument that we must ensure that we do not discourage activity in that area because, if we do, the workforce will relocate to other parts of the world, leaving Scotland without the expertise that we need in both the supply chain and the workforce to build out ScotWind and the other industries that will keep us as an energy-producing nation.

Scotland has a good story to tell about decarbonisation, because we have the innovation and targeted oil and gas licensing route. The first licences that have been given through the consenting unit have been for the INTOG scheme, which is about allowing the build-out of floating offshore wind to provide power to existing oil and gas-producing platforms. That means that they can use electricity, rather than diesel, in their production processes, which will markedly reduce production emissions in that area. We are the only part of the UK that has done that, and there are quite a lot of lessons for other oil and gas-producing countries to learn if they are looking to decarbonise their emissions from oil and gas production.