Government support and investment for net zero is vital if we want Scotland to fully realise its potential to be a world-leader in clean energy technology. The necessity of support has already been recognised the world over, not least in the United States, which has placed supporting innovation, research and development of clean energy products and projects at the heart of its Inflation Reduction Act, a principle that was echoed by the European Union in its response. Any fears that the UK in general, and Scotland in particular, risked getting left behind have been largely allayed by Jeremy Hunt’s recent budget, which contained welcome incentives for net zero and clean energy, but we still need to go much further.
The £20billion fund to support carbon capture, utilisation, and storage (CCUS) is a welcome show of confidence from the government in this vital technology, which has not always enjoyed the support it needs and deserves. The scale of the funding – admittedly spread over two decades – will increase confidence that the north-east’s Acorn project will get the green light from ministers later this month. The decision to allow specific oil and gas infrastructure to be repurposed for CCUS will also help generate cost savings for businesses as the transition gathers pace.
As a nation we boast an impressive history in engineering, however, to secure the future and propel us forward, we need innovation and investment to deliver at the pace and scale required. Incentives for small and medium-sized businesses undertaking intensive research and development will be significant for many energy firms in the north east and across Scotland. This will help foster a genuine net zero ecosystem in Scotland, encouraging it as a centre of expertise, helping to support the wider industry in creating sustainable, high-quality jobs, building supply chain capacity and retaining IP in the United Kingdom. Increased budgets for the Energy Security and Net Zero department and the Science, Innovation and Technology department, coupled with greater flexibility on how that money is spent, is also welcome. While additional detail is expected on plans for a Scottish investment zone – which must include a focus on clean energy – this all amounts to an important package of measures that will help the net zero industry in Scotland realise its huge potential.
There is, of course, more that can still be done, particularly when we consider the measures and incentives introduced by others around the world. The support for CCUS is welcome, but to meet climate change targets, investmentin every sector in the net zero portfolio is needed. At this point there is little to no mention in the budget of other clean energy solutions, such as low carbon, renewables, or hydrogen, which all have a role to play in the journey to net zero. Overall, when the revised net zero strategy is published shortly, I would like to see a more joined-up approach from government, offering greater incentives, funding for a range of net zero industries, and support for decarbonisation in the supply chain.
The US and EU have made bold bets on their net zero industries we must make sure Scotland and the UK is not left behind and realises its potential as a clean energy technology powerhouse.
This article originally appeared in the Scotsman Business section on 29th March 2023.
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