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Meeting of the Parliament

Meeting date: Thursday, May 25, 2023


Portfolio Question Time

Net Zero and Just Transition

The Deputy Presiding Officer (Annabelle Ewing)

Good afternoon. Our next item of business is portfolio question time. The portfolio this afternoon is net zero and just transition. [Interruption.] I thought that my voice was not as loud as normal. I thank Murdo Fraser for gesticulating.

As ever, I would appreciate brief questions and succinct answers to match, in order to get in as many questions as possible.

Transport Options (Rural Areas)

To ask the Scottish Government what action it is taking to improve transport options in rural areas. (S6O-02276)

The Minister for Transport (Kevin Stewart)

Our strategic transport projects review includes recommendations that are focused on rural areas, including connecting towns and villages, improving active travel on trunk roads and investing in demand-responsive transport to improve connectivity.

However, we are already taking action. The Go-Hi project has improved accessibility to integrated transport services in the Highlands. The community bus fund and the toolkit of powers in the Transport (Scotland) Act 2001 will enable local authorities to pursue options that best meet their needs, including the distinct challenges that rural areas face, and this year’s record active travel funding will support new projects for rural communities.

Roz McCall

Bus services are a vital lifeline for local communities, especially in rural areas. In my region, a constituent with poor mobility used to take the 27A bus from Dunfermline to Kirkcaldy to collect her prescription. That service has been cancelled, which makes it even more difficult for her to get her much-needed medicine.

Due to the Scottish Government’s decision not to extend the network support grant plus scheme, fares have risen by an average of 15 per cent across east Scotland, and it is projected that local services in Fife will be cut by a further 10 per cent. Will the Scottish Government publish its fair fares review before the summer recess in 2023, or will my rural constituents continue to suffer additional cuts to routes and increases in costs?

Kevin Stewart

The network support grant plus was a package that we put in place to help bus operators during the Covid pandemic and which had a real impact on services. It was designed not to be a permanent fixture but to deal with that period of emergency.

We will continue to work in partnership with bus operators and local authorities to create the best possible services. The network support grant will continue to provide support to the bus industry in 2023-24. It is paid per kilometre travelled, which targets support at the longer and less commercially viable routes in rural and island communities.

We will publish our fair fares review in the near future. As Roz McCall and others will understand, it is a hefty piece of work that we want to get right for all the people of Scotland.

Liam McArthur (Orkney Islands) (LD)

The minister will be aware that the former Deputy First Minister agreed with Orkney Islands Council to establish a task force to look at replacement of the ferries that operate on Orkney’s lifeline internal routes. Since the election of the new First Minister, proposed meetings of the task force have not taken place. I am not aware of alternative dates having been set, so I will be grateful if the minister will advise when the task force is due to meet next, and if he will give an assurance that the topic will remain on the radar of the Cabinet, given that the former Deputy First Minister is no longer in post.

Kevin Stewart

The task force will be chaired by the new Deputy First Minister, Shona Robison. I will update Liam McArthur when a date is in place for the first meeting. We recognise the importance of the work of that task force. I intend to go to Orkney in the very near future. As Liam McArthur is aware, I have had a couple of meetings with the council there in recent times. I hope that the co-operation and collaboration that we have in place will continue.

Mark Ruskell (Mid Scotland and Fife) (Green)

Scotland’s rural communities have great ideas on how to improve our national rail network. At the moment, ScotRail services pass through Newburgh, but have not stopped there since the station closed in 1955. A simple low-cost modular station could reconnect Newburgh to the rail network. What discussions has the minister had about the opportunities that modular stations provide? Will the minister agree to meet me and the Newburgh Train Station Campaign group in the months to come?

Kevin Stewart

In the short time in which I have been in post, I have not had any discussions about modular stations, but I understand that Transport Scotland officials are already engaged with SEStran—South East of Scotland Transport Partnership—on its appraisal of the Newburgh area and have offered a meeting. It should be noted that modular stations are not suitable for all locations but, as always, I am happy to have further discussions with Mr Ruskell and his constituents on those matters.

Energy Performance Certificate Ratings (Rural Areas)

2. Liz Smith (Mid Scotland and Fife) (Con)

To ask the Scottish Government what its response is to a recent report by Changeworks, which found that homes in rural areas have a lower energy performance certificate rating than the rest of Scotland. (S6O-02277)

The Minister for Zero Carbon Buildings, Active Travel and Tenants’ Rights (Patrick Harvie)

I thank Changeworks for its work in that area and for bringing forward that important report.

The average energy performance certificate rating of rural properties is lower than that of those in urban areas because of the typically more expensive fuels that are used or available, how those are reflected in the current EPC metric, and the historically lower energy efficiency standards.

We propose that all housing in Scotland meet the equivalent of EPC rating C by 2033 and that we revise EPC metrics. We offer support to improve the energy efficiency of rural homes, including a funding uplift to our home energy Scotland grant and loan scheme, and targeted fuel poverty support.

Liz Smith

The minister knows that improving energy efficiency in rural and off-grid homes is absolutely critical for reducing energy bills and meeting net zero targets, but as the Changeworks report makes very clear, the Scottish National Party’s heat-pump approach does not suit many of the older properties in the rural economy. What is the SNP doing to encourage investment in alternative heating solutions, such as biofuel liquefied natural gas?

Patrick Harvie

We are working on policy on biofuels in line with the United Kingdom Climate Change Committee’s recommendations, which see something of a role but recognise that there will be limits to the role of bioenergy in the heating system.

Meanwhile, as I said in my first answer, we provide an uplift of the grant and loan schemes for rural areas. In particular, we need to ensure that we invest in skills and capacity in the industry. To give just one example, we have invested in a mobile training centre for heat-pump installation, which is hosted by South Lanarkshire College, but is available to any college in Scotland for training in rural areas on site. That will help to ensure that local communities have access to skilled professionals who are able to assess and install heat pumps in all types of buildings.

Beatrice Wishart (Shetland Islands) (LD)

Last April, the Scottish Government estimated that more than 874,000 households were in fuel poverty in Scotland, but its insulation and energy efficiency scheme has now closed to applications until October. At the current rate of progress, it would take 165 years to insulate every fuel-poor household in Scotland, so can the Scottish Government explain what has gone wrong?

Patrick Harvie

Something has gone very right, in that we are replacing that scheme with a much-improved successor. While that transition happens, new referrals will be referred to the provider under the terms of the successor scheme, rather than the less generous terms of the previous scheme.

Beatrice Wishart and other constituency and regional members who represent rural and island communities have repeatedly expressed their concerns, but the Scottish Government’s heat in buildings programme is the most ambitious of such programmes in any part of these islands and is looking to achieve investment in a sustainable and equitable system that insulates people from fuel poverty and is comparable to the best achievements in other countries in Europe in previous decades.

Low-carbon and Renewables Sector

3. Jackie Dunbar (Aberdeen Donside) (SNP)

To ask the Scottish Government whether it will provide an update on the role that it anticipates that the low-carbon and renewables sector will play in the transition to net zero, including on any relevant discussions that took place at the recent All-Energy conference in Glasgow. (S6O-02278)

The Minister for Energy (Gillian Martin)

The low-carbon and renewables sector plays an essential role in delivering Scotland’s net zero ambitions. The draft energy strategy and just transition plan set out a vision for an energy system that delivers affordable, resilient and clean energy supplies.

The First Minister, myself, and three other Government ministers attended the All-Energy conference. We had constructive discussions with a range of energy companies and other stakeholders. The First Minister particularly re-emphasised this Government’s commitment to the Scottish Cluster, and the importance of an early and positive decision from the United Kingdom Government on carbon capture, utilisation and storage in Scotland.

Jackie Dunbar

In the First Minister’s speech to the All-Energy conference, he spoke about the flaws in the current transmission network charging system. What discussions has the Scottish Government had with the UK Government about fixing the methodology that is used, which, as it currently stands, is a potential barrier to supporting our renewables sector?

Gillian Martin

That assessment comes up in practically every single meeting that I have with every single stakeholder. The Scottish Government has repeatedly called for a change to the current system of transmission network use of system charges. My officials are in regular contact with Ofgem on that matter. I am pleased that Ofgem has reconvened the TNUOS charges task force, which was delayed to allow it to focus on security of supply over the winter.

The fact of the matter remains that a new approach, rather than small modifications to methodologies, is needed. We will continue to raise that with Ofgem and our counterparts in the UK Government to push for a fairer solution that recognises the renewable capabilities of Scotland. We need to do everything that we can do to maximise Scotland’s potential to power the nation using low-emissions technology by harnessing our substantial resources in a way that creates economic prosperity for communities and businesses and, in the end, supplies our households with the cleaner and cheaper power that they so desperately need and want.

Three members are seeking to ask supplementary questions. I intend to take all three.

Liam Kerr (North East Scotland) (Con)

The Scottish Government’s transition of North Sea workers to offshore wind roles has delivered only 3,100 positions in Scotland. I have discovered that the Government does not even break that data down to understand where the jobs are located. It therefore cannot even say whether a single worker in the north-east is part of the transition. When does the Government intend to start collating and interrogating data properly, and thus provide a more realistic and rigorous assessment of its failure to deliver a just transition?

Gillian Martin

I am familiar with Mr Kerr’s asks on that. I think that I just issued a parliamentary answer to his written question on the subject.

As things stand at the moment, we do not have that granular data. However, methods are afoot in Government to collate and produce the data in the way that has been requested. That work is on-going.

Sarah Boyack (Lothian) (Lab)

I put on my record my apologies for cutting it fine with my arrival today.

Given the fantastic opportunities that were highlighted at the All-Energy conference and the need to tackle both the cost of living crisis and the climate crisis, what discussions does the minister have planned with the Convention of Scottish Local Authorities to support local authorities to deliver council and community co-operative led heat and power schemes, given the huge benefits that that could deliver to our constituents?

Gillian Martin

That came up in discussion with the onshore wind strategy leadership group yesterday. We have to engage the Convention of Scottish Local Authorities on how we can support communities in relation to shared ownership, in particular. We are doing a number of pieces of work in that area and we are taking advice from the strategic leadership group that I mentioned. We were actively working on that at its quarterly meeting yesterday.

I do not think that we can do this without the help of COSLA and our local government partners. I am therefore really keen to have that conversation with our colleagues in COSLA quite soon. However, I want to wait for advice that will come from the group that I mentioned so that I can make those conversations more constructive and put in place a secure plan for how maximise the opportunities that we have in communities. We can also learn lessons from the communities that have already made that leap to make the plan more efficient.

Ivan McKee (Glasgow Provan) (SNP)

The just transition to net zero will require significant levels of investment, including public and private sector investment, if it is to deliver its ambitions. I was encouraged by my discussions with investors when I spoke at All-Energy’s conference the other week. What work is the Scottish Government doing to lever in capital investment for infrastructure and business growth opportunities to deliver the net zero transition?

Gillian Martin

Pretty much every stream of work that is being done in respect of energy will involve a mix of public sector and Government support and will also lever in capital from private investors. The Government needs to signal that private investors will be putting their money into the right areas; we are working closely with Scottish Enterprise on that. Ivan McKee will know how important that body is in signalling where the Government’s goals are on private sector investment and where we can achieve confidence in certain areas.

If Ivan McKee wishes to write to me on that point, I could break that down into the individual pieces of information that he requires.

Green Jobs Fund (Kilmarnock and Irvine Valley)

To ask the Scottish Government what it anticipates the impact of the green jobs fund will be on the Kilmarnock and Irvine Valley constituency. (S6O-02279)

The Cabinet Secretary for Net Zero and Just Transition (Màiri McAllan)

The green jobs fund aims to create green employment, drive economic growth, and support businesses to transition to a low-carbon economy through capital investment in equipment and premises, and research and development.

Discussions on projects in Ayrshire that could be supported by the fund are under way. There is the potential to create hundreds of new jobs in the area. As future green jobs fund awards are made, we will continue to update Parliament on the progress of the fund and the expected green jobs resulting from it.

Willie Coffey

I advise the cabinet secretary that, with its partners and employers, East Ayrshire has launched a net zero accelerator programme to focus on gaining knowledge on how best to move to net zero and to gain the required skills and accreditation. Does she agree that it is vital that every part of Scotland both participates in and benefits from the transition to net zero—in particular, through vehicles such as the green jobs fund? Will she give my constituents an assurance that the Government will assist in any way that it can to build such capacity locally, as we strive to make that important transition in every community in Scotland?

Màiri McAllan

Willie Coffey makes an excellent point. The scale of the climate and nature crisis, and the pace at which our society needs to move to make the change commensurate with that challenge, means that progress must absolutely be built from communities, for communities and within communities. Only then can the transformational change that is required in the coming years and decades be delivered at the scale required and be sustainable, too. I give my commitment to Willie Coffey and his constituents that the Scottish Government is dedicated to working with them as we take that journey.

Hydrogen Innovation Scheme

5. David Torrance (Kirkcaldy) (SNP)

To ask the Scottish Government what discussions the net zero secretary has had with ministerial colleagues regarding how the £7 million of grants allocated through the hydrogen innovation scheme will support Scotland’s low-carbon economy. (S6O-02280)

The Cabinet Secretary for Net Zero and Just Transition (Màiri McAllan)

I regularly engage with ministerial colleagues on maximising the economic opportunities presented by the global transition to net zero, including our drive to reach 5GW of installed hydrogen production capacity by 2030.

We have backed up that ambition by providing grants totalling over £7 million, which have been offered to 32 Scottish projects through the hydrogen innovation scheme. Those will advance innovative solutions to scaling up hydrogen production, storage and distribution.

As I highlighted to industry stakeholders at a meeting of the Aberdeen and Grampian Chamber of Commerce earlier this week, that funding—together with our just transition fund and the energy transition fund—demonstrates our commitment to supporting Scotland towards achieving a fair, prosperous and speedy transition.

David Torrance

H100 Fife is a first-of-its-kind demonstration project that is leading the way on decarbonising home heating. It will provide evidence for future low-carbon policy decisions and a clear pathway towards net zero heating for Scotland. Does the cabinet secretary agree that hydrogen power offers a promising opportunity as we look to transition from fossil fuels and decarbonising home heating?

Màiri McAllan

I agree with David Torrance’s point. We know that hydrogen power will form a key part of our journey to net zero. Complementing electricity, it will play a role in industrial decarbonisation, transport and heating homes and other buildings.

The SGN H100 Fife neighbourhood trial will feed into that work, as will other large village and town trials in the United Kingdom. The H100 Fife project is currently under construction, and it aims to fit 100 per cent hydrogen boilers in 300 homes in Leven. I understand that the project is scheduled to go live in 2024 and will operate until March 2027. The Scottish Government has gladly provided £6.9 million-worth of grant funding to the project.

Brian Whittle (South Scotland) (Con)

I know that the cabinet secretary agrees with me that we have a fantastic opportunity to be world leading in the green hydrogen economy, but we are behind the curve: behind Germany, Holland, Belgium, the middle east and the USA.

What will the Scottish Government do to address the red tape that business has reported to me in respect of accessing the pump-primed funding for early-stage hydrogen companies that the cabinet secretary mentioned to ensure that, in turn, we release further money from private investment to fully realise our hydrogen potential?

The Deputy Presiding Officer

Before I ask the cabinet secretary to respond, I remind all members that they are required to be here for the start of proceedings should they wish to contribute to those proceedings. If they wish to contribute, therefore, they should apologise before they make their contribution.

Màiri McAllan

We absolutely recognise Scotland’s potential in hydrogen and we are committed to doing everything that we possibly can to maximise its realisation. That includes our “Hydrogen Action Plan”, but we are not just planning—the plan is supported by £100 million of capital funding, which is designed to accelerate and maximise the production of renewable hydrogen in Scotland for use in Scotland.

In addition, analysis suggests that there is also a very large hydrogen export opportunity for Scotland, with some estimates stating that there could be between 70,000 and more than 300,000 jobs protected or created, and that the impact of those export scenarios on gross value added could range from £5 billion to £25 billion per annum by 2045.

The Scottish Government is doing everything that we can to realise those opportunities. We very much need the UK Government to do its part and to act with the speed that we are demonstrating in order to realise that potential fully.

Question 6 has been withdrawn.

Proposed Scottish Carbon Credits

To ask the Scottish Government whether it will provide an update on its plans for Scottish carbon credits, including how it ensures benefits for local communities. (S6O-02282)

The Cabinet Secretary for Net Zero and Just Transition (Màiri McAllan)

The Scottish Government is committed to establishing a values-led high-integrity market for responsible private investment in our natural capital, as set out in “Scotland’s National Strategy for Economic Transformation”. That commitment includes the voluntary carbon markets, as backed by the United Kingdom Climate Change Committee, and is supported by our interim principles for responsible investment in natural capital.

Those principles set out that investment should deliver integrated land use; provide public, private and community benefit; demonstrate engagement and collaboration; be ethical and values led, be of high environmental integrity; and support diverse and productive land ownership. Those are Scottish ministers’ expectations of those who would invest in our natural capital.

Richard Leonard

I thank the cabinet secretary for that reply, but is it not the case that, far from protecting community interests in achieving net zero, the Scottish National Party-Green Government has embarked on an exercise in privatising our nature and opening up carbon credits to speculators and giant corporations to asset strip, cash in and make all the gains, and so widen the wealth inequality gap even further? They include Fleetcor, which sells fuel cards to the road haulage industry; the oil giant Shell; defence companies such as Thales Group; and banks such as Barclays.

How is that green or sustainable, or even in the national interest? How is that values led? Is that what equality, opportunity and community looks like under this SNP-Green Government?

Màiri McAllan

It is quite the opposite of the narration from Richard Leonard. It is about the Scottish Government recognising that our natural capital is an exceptionally valuable asset to our people and to our environment. It is also about our recognising that there are many interventions that we need to take in our natural environment that will help us to rise to meet the challenge of the climate and nature emergency, and that will have other co-benefits, including good green jobs in rural areas.

However, the public purse can never, and will never, fund those interventions alone. We are therefore dedicating ourselves—as Miss Martin set out—to leveraging necessary private investment, but we are doing so in a pioneering, values-led, high-integrity way that is verifiable and that benefits the people in this country. That sits alongside the development of an ambitious land reform bill and continued investment in the Scottish land fund, which is helping communities throughout the country to buy land and assets in their local areas and put them to local use.

Maurice Golden (North East Scotland) (Con)

Pension and hedge funds are engaged in the carbon market, similar to the way in which they are involved in the deposit return scheme, where the Scottish National Party and Greens decided to award a multimillion pound waste collection contract to an American hedge fund. Can the cabinet secretary confirm that it is SNP-Green policy to develop new initiatives in order to benefit multinational hedge funds?

Màiri McAllan

No, that is not this Government’s motivation. As I have just narrated in response to Richard Leonard, our motivation involves seeking to harness the opportunities that we have in abundance in Scotland in a way that helps us to rise to the climate and nature emergency, but equally in a way that empowers our people to benefit from the schemes and the developments that will happen in the communities around them.

I refer Maurice Golden to the principles for responsible investment in natural capital. They are pioneering principles that are being referred to by other organisations in countries that are trying now to do likewise, and they state very clearly ministers’ expectations on ethical and values-led investment, high environmental integrity and public, private and community benefit. I would be more than happy to furnish Maurice Golden with evidence of how they are now being utilised by those who are investing in Scotland.

Scottish Zero Emission Bus Challenge Fund

To ask the Scottish Government how the Scottish zero emission bus challenge fund is supporting change in the bus sector, in light of Scotland’s net zero ambitions. (S6O-02283)

The Minister for Transport (Kevin Stewart)

Last week, while visiting Alexander Dennis in Larbert, I launched the second and final phase of the challenge fund. The Scottish Government is offering up to £58 million to transform the market for zero-emission buses, on top of the previous investment of more than £113 million in zero-emission buses.

It is clear that the market is now at a pivotal point, and the money that I am offering the sector could make the zero-emission bus market self-sustaining, enabling bus and coach operators of all types and sizes to achieve zero-emissions over the coming years.

Fulton MacGregor

Bus transport is crucial to many of our communities, and services such as the recently reintroduced Citylink 902 service provide a vital link in my constituency to city centres. Initiatives such as ScotZEB and the transformational under-22 bus pass will be crucial to ensuring that Scotland’s bus sector is at the heart of the modal shift that we need to see away from cars as we strive for net zero. What level of support has the Scottish Government already provided via ScotZEB, and how many buses has that provided?

Kevin Stewart

I should note the campaigning efforts of Fulton McGregor and Neil Gray on the Citylink 902 service.

The Government awarded £62 million through the first phase of ScotZEB, helping operators acquire 276 battery electric buses and the associated charging infrastructure. That is over and above the £52 million of capital investment that we have put in previously, plus a resource commitment worth up to £20 million that we provided through our previous fund to support 272 battery electric buses.

We are helping the bus sector to decarbonise, and we are encouraging more people to choose to take the bus and to take fewer journeys by car. Alongside that, we have seen more than 62 million free bus journeys made by young people across Scotland since the introduction of our young persons free bus travel scheme. That is all good news for the people of Scotland.