Scotland’s claims to be a green energy superpower in the making have been endorsed by business leaders who have warned that governments need to do much more to support the sector.
CBI chief executive Rain Newton-Smith said Scotland’s natural resources are the envy of the world and could provide a “golden ticket for UK growth”.
Hailing the scale of offshore wind energy development off the country and the potential of marine energy, Ms Newton-Smith said Scotland “has the tools at its fingertips to be a global clean energy superpower”.
However, she highlighted fears that what the employers' organisation sees as a “once in a lifetime” opportunity could be squandered unless ministers address the fears of investors who will be required to fund the transition to a low carbon economy.
READ MORE: 'Desperately weak' SNP Government fails on oil and renewables
Noting that the UK faces fierce competition for investment from other countries, Ms Newton-Smith said Scotland had slipped down the international rankings amid concerns about issues ranging from policy uncertainty to the tax burden on firms.
“Though Scotland has made huge progress in pioneering the concept of a just transition and setting one of the most ambitious net zero targets in the world, the truth is, on green growth, as on long-term growth across the UK, we’re not where we need to be,” Ms Newton-Smith told the CBI’s annual dinner in Glasgow.
She added: “Scotland, the UK – we’ve started to stall on the green investment we need. Since 2020 we’ve fallen down the league tables, behind France and Germany. We’ve lost our first-mover advantage in green growth markets to vast economic stimulus packages from the US and China.”
As Rachel Reeves finalises plans for the Budget she will announce on October 30, Ms Newton-Smith appeared to echo concerns the Chancellor could make matters worse by confirming plans for an increase in the North Sea windfall tax.
“Energy companies whose current revenues come from oil and gas activities: right now, they represent over 10 per cent of Scotland’s GDP and they can also be a huge part of the transition to net zero,” observed Ms Newton-Smith.
Noting that oil and gas firms have faced a series of changes since the energy profits levy was introduced in 2022, she added: “That’s not fiscal certainty and it’s not a spur to invest – exactly when that investment is most important for transitioning the sector.”
READ MORE: Mad North Sea tax hike will cost UK billions warns oil industry big gun
The CBI has underlined the importance of delivering a UK-wide Net Zero Investment Plan that can bring focus to decarbonisation efforts and unlock essential private sector funding.
Ms Newton-Smith noted that the Westminster Government did, however, appear to recognise the potential of Scotland’s renewable energy industry to provide a big boost to economic growth while supporting the net zero drive.
“Already, we’ve had the announcement of the National Wealth Fund and Great British Energy,” she said. “And just last week we heard strong rumours that GB Energy is likely to be based in Aberdeen.”
The CBI wants to see details of how the wealth fund and Great British Energy will operate and assurances that they will not duplicate or displace private sector activity.
Noting that ministers needed to focus on practicalities rather than laying out visions she complained that windfarm developments had been delayed amid failings in the planning systems operating in Scotland and south of the border.
While the Westminster and Holyrood administrations have promised to address planning issues, Ms Newton-Smith noted: "We’ve got vision but not detail. We’ve got direction but not certainty."
READ MORE: Scottish turbine plant delay highlights energy jobs challenge
The Scottish Government yesterday launched a Green Industrial Strategy which it said would help the country realise the economic benefits of the global transition to net zero.
Mags Simpson, Interim CBI Scotland Director, said the publication of the strategy was a key marker for capitalising on the economic opportunities afforded by the net zero transition and a strong signal of confidence in Scotland’s green economy.
She added: “Firms will however want to see more in terms of how this aligns with other key net zero plans and strategies, both within Scotland and across the UK – like the yet to be published Energy and Just Transition Plan.”
The administration led by Nicola Sturgeon launched a £500m Just Transition fund in 2021. MSPs have highlighted serious concerns about the effectiveness of the initiative.
Ms Sturgeon’s administration published a draft energy strategy in January last year following delays.
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