Chamber and committees

I will in a second, but I really want to get to the end of my point.

I say to Graham Simpson that I am not personally about the fast lane: I am about going in the right direction with stakeholders behind me and about the careful consideration that Mark Ruskell mentioned. The consultation time period that is set out in the guidance for statutory environmental assessments under the Environmental Assessment (Scotland) Act 2005 alone could take six months. For those reasons we do not support amendments 2 and 3, so I ask Graham Simpson not to press them. I think that we rush things at our peril, to be honest.

I assure Mr Doris that a just transition is embedded throughout a lot of the Government’s thinking across portfolios. I will come to that later.

Ensuring a just transition is central to the development of a circular economy. Amendment 137 would ensure that the just transition principles that are set out in section 35C of the Climate Change (Scotland) Act 2009 are taken into account by ministers in the development of the circular economy strategy.

The committee also emphasised the importance of behavioural change. I agree with that view, so amendment 138 proposes an additional requirement that, in developing the circular economy strategy, the Scottish ministers must have regard to the kinds of behavioural change that are needed to meet the strategy’s objectives.

Finally, the committee called for a clearer link in the bill between the strategy and the targets. Those are already linked by the criteria for a circular economy being repeated in the same terms in sections 1 and 6. However, amendment 139 would go further and put a specific obligation on ministers to have regard to the targets in preparing the strategy.

Together, amendments 136 to 139 provide for a comprehensive and broad-reaching circular economy strategy that takes into account a range of relevant factors. The amendments also impact on some of the amendments that have been lodged.

I want to make a point about the use in the legislation of the phrase “have regard to”, which means, in effect, that ministers must take account of the principles in preparing the strategy. We think that that is the appropriate level of compliance.

I will talk about some of the amendments that have been lodged by other members. Several amendments refer to just transition principles. As I have said, I agree that ensuring a just transition is central to the development of a circular economy. That is why I have lodged amendment 137, which will ensure that the just transition principles are taken into account in the development of the circular economy strategy.

More widely, our approach to just transition planning is guided by our just transition planning framework and the national just transition outcomes that are described in that framework. I would like to provide reassurance that circular economy principles are, therefore, being considered as part of on-going just transition planning work, particularly in relation to supporting economic, job, place and environmental outcomes.

However, I would say that just transition is wider than that, because it is also about ensuring that people are not disadvantaged unnecessarily, and the word “communities” could also refer to, for example, people in rural areas or those who have mobility issues. We must always take into account the possible unintended consequences of what we are doing, for good reason, and think about how they might impact on people. I agree with Bob Doris’s comments on that.

The Government is committed to just transition plans for high-emitting sectors, sites and regions. We began with our energy strategy and just transition plan, which will be published in the summer. We are also developing sectoral plans for agriculture and land use, the built environment and construction, and transport. I will take those forward with my colleagues who have responsibility for those portfolio areas. Work is also well under way on the just transition plan for Grangemouth and the site plan for the Grangemouth industrial cluster.

Amendment 93 would, I believe, add unnecessary detail to the circular economy strategy. If Government amendment 137 is accepted, the Scottish ministers will have to “have regard to” just transition in the development of the strategy, so it will already be considered. Amendments 98 and 99 are not necessary, given amendment 137, which will require ministers to have regard to just transition principles in developing the strategy.

Circular economy principles should be embedded across all sectors of the economy, which is why they are already being considered as part of just transition policy. Requiring the level of detail that is referred to in amendments 208 and 209 to be included in the circular economy strategy would be burdensome; those matters will be considered as part of the sector-specific plans that are already in development. For those reasons, the Scottish Government cannot support Sarah Boyack’s amendments 93, 98 and 99 or Bob Doris’s amendments 208 and 209.

I will move on to other amendments that have been mentioned. I agree with the principle and sentiment that Monica Lennon expresses in amendment 132. The wider extraterrestrial—did I say extraterrestrial? [Laughter.] I realise why everyone is looking at me as though I am a bizarre person. The wider

“extraterritorial impact of material consumption”

is an important consideration. The Scottish Government is already required to annually publish carbon footprint statistics, which include statistics on embedded carbon from imported goods and experimental statistics that outline the embedded material requirements by country of origin in 2019 that were associated with final consumption in Scotland. Zero Waste Scotland also publishes material flow accounts, which consider imported goods.

Monica Lennon mentioned the impact of waste that is exported to other countries, but I am afraid that the policy on that is reserved to the UK Government. We need to be clear about what we can and cannot influence. Exports are a matter that is reserved to the UK Government, and the carbon footprint is based on broad trade and is heavily dependent on emissions from other countries, over which Scotland has no control. However, I am happy to reflect on what we can reasonably and feasibly do ahead of stage 3. I cannot support amendment 132 as it stands, but we will take it away and have a look at what we can include that recognises the wider impacts that Monica Lennon mentioned.

We are required to report at the halfway point, and I think that that is sufficient. Members are always welcome to write to ministers asking for updates on whether targets are being met in the intervening period, but the proposed approach strikes the right balance.

On amendment 190, in the name of Maurice Golden, the circular economy sits at the heart of the Scottish Environment Protection Agency’s published “One Planet Prosperity: A Waste to Resources Framework”, which recognises that the organisation has a clear role in helping Scotland to move to a more circular economy and that it is in a unique position for protecting Scotland’s environment while helping to create prosperity through greater resource efficiency. The framework already guides SEPA’s work on waste and resources, and SEPA guidance already takes account of a circular economy in which resources are recirculated in the context of there being high levels of environmental protection.

More than 100 individual pieces of SEPA guidance relate to waste management activities and are generally on legal, technical or pollution issues—for example, interpretation of legal definitions, practical guidance on consigning special waste, landfill waste acceptance criteria, odour abatement and when a recycled product such as compost ceases to be waste. It also includes guidance on UK schemes, such as the scheme on producer responsibility.

Mr Golden said that amendment 190 is a “nudge” in a certain direction, but I hope that I have demonstrated that SEPA has already embedded such action in all its activities. All the guidance already takes into account the regulators code of practice, SEPA’s statutory purpose and its waste to resources framework, so requiring that all waste guidance be reviewed would be a significant undertaking with the prospect of there being no significant change, given that SEPA guidance is already in line with that framework. SEPA will also be involved in, and consulted on, development of the strategy.

In short, therefore, I believe that amendment 190 is unnecessary and could be overly burdensome on SEPA. On that basis, I cannot support it.

Yes. I would like to briefly outline what has been done to date.

The order under consideration is a minor amendment to the Renewables Obligation (Scotland) Order 2009. The renewables obligation scheme provides revenue to generators of renewable energy through the trading of renewables obligation certificates, or ROCs. Suppliers purchase ROCs, either directly or through traders, from generators. The generators are awarded ROCs by the Office of Gas and Electricity Markets in proportion to their electricity output. The cost of the scheme is recouped by suppliers through energy bills. The number of ROCs that suppliers must provide to Ofgem for the electricity that they supply is referred to as the obligation level. That level must be published by the Scottish ministers before 1 October each year, giving at least six months’ notice to suppliers before the obligation year begins.

The amendment to the 2009 order is necessary to allow the 2024-25 obligation level to be altered to reflect changes in United Kingdom Government legislation that introduce a new 100 per cent energy intensive industries exemption. It ensures that the ROS obligation level aligns with the UK legislation and the new 100 per cent energy intensive industries level. It also ensures alignment with the scheme in England and Wales, with a parallel amendment being made by the UK Government.

I believe that the amendment order is necessary and proportionate. I will, of course, be happy to take any questions that members have.

Yes. The most important thing is that we provide certainty. As I outlined in my opening remarks, we want to work in tandem with the UK Government to provide that certainty and also to do joint consultation.

There is concern that, if we do not make the exemption for energy intensive industries, particularly in the high fuel price situation that we have at the moment, they could find that they are not profitable any more and they may have to consider things such as job losses—that is everything that we want to avoid. The large manufacturing sector is particularly affected—it obviously consumes a great deal of energy—so the policy protects them to a certain extent and protects those jobs. [Gillian Martin has corrected this contribution. See end of report.]

There are about 43 in Scotland.

Obviously, everything around the decarbonisation of energy is devolved to Scotland and our economic department is looking particularly at high-energy sectors such as manufacturing.

I am not sure that this particular instrument is about incentivising anything. I think it is about protecting jobs. We have large manufacturing, such as food production and feed-stock production. The original point behind the renewables obligation was to get a subsidy for renewables, but this particular exemption is about large manufacturers that are particularly affected by inflation and high fuel costs. There are thousands of jobs associated with those manufacturers and this is about protecting them in the face of a number of pressures. [Gillian Martin has corrected this contribution. See end of report.]

The solutions to that lie in other schemes and all the work that we are doing with various sectors. There are obviously incentives for decarbonisation in the business support and procurement landscape in Scotland. We are working on a green industrial strategy and there will also be incentives in that. There is incentivisation across the piece of what the Scottish Government puts forward, particularly with our enterprise agencies.

This particular instrument, to my mind and my interpretation, is about keeping the manufacturing and energy intensive industries going and taking away one of the pressures on them, particularly given the global landscape of fluctuating energy prices that at the moment are outwith our control. As we look to the future and have more renewable electricity, in particular, in Scotland, those pressures will decrease.

No, I will not take that chance. I think that I have said everything that I need to say. Thank you.

Gillian Martin has identified errors in her contribution and provided the following corrections.

At col 3, paragraph 6—

Original text—

There is concern that, if we do not make the exemption for energy intensive industries, particularly in the high fuel price situation that we have at the moment

Corrected text—

There is concern that, if we do not make the exemption for energy intensive industries, particularly in the high electricity price situation that we have at the moment

At col 4, paragraph 1—

Original text—

That will amount to quite a substantial sum if you think about the huge amount of fuel that is used by those particular industries.

Corrected text—

That will amount to quite a substantial sum if you think about the huge amount of electricity that is used by those particular industries.

At col 5, paragraph 1—

Original text—

but this particular exemption is about large manufacturers that are particularly affected by inflation and high fuel costs

Corrected text—

but this particular exemption is about large manufacturers that are particularly affected by inflation and high electricity costs