UK dependent on Scotland for net zero target

The UK government will depend on Scotland to deliver on targets for decarbonising its energy network and production, and so decisions need to be made at a pace that reflects Scottish ambitions, Scotland's cabinet secretary for net zero, energy and transport Michael Matheson told Argus.

Scotland has committed to achieving net-zero emissions by 2045. This is five years earlier than the 2050 target recommended for the whole of the UK by government advisory body the Committee on Climate Change (CCC). "We have a very ambitious target and it is critical that we take forward the policies that can help deliver those objectives," Matheson said.

Among other funding schemes, Scotland set up a £62mn ($87mn) Energy Transition Fund last year to support businesses in the oil, gas and wider energy sectors over the next five years. And it has earmarked £100mn to support its Hydrogen Action Plan, which will be released later this year. But while the CCC agrees that Scotland could reach net zero earlier than the UK as a whole, notably because of its carbon capture and storage (CCS) potential, it said the nation could not deliver on this target through devolved policy alone. Energy remains a reserved matter, with decisions taken by the UK parliament. "It is extremely important in the areas reserved to the UK government that decisions are taken in a timely fashion and at a pace that reflects Scotland's target, including in areas such as oil and gas," Matheson said.

The oil and gas sector will play an important role in helping Scotland achieve its objectives — through its workforce, skills, scale and technology know-how — and it remains extremely important in ensuring that the UK has energy security, he said. The oil and gas industry supports just over 100,000 jobs in Scotland, and Matheson said the Scottish government is making sure no-one is left behind during the energy transition. "There is an opportunity to make sure that we secure the green industry, which can play an important part to reinvigorate the northeast of Scotland," he said.

As part of the Energy Transition Fund, Scotland last week granted £26mn for the creation of an Energy Transition Zone in Aberdeen, which could support 2,000-2,500 green jobs by 2030, and 10,000 transition-related jobs. And "we are investing over £50mn in the Falkirk growth deal, which includes Grangemouth," Matheson said. A board has been created to co-ordinate actions from the private and public sectors to respond to the opportunities arising from the energy transition and the decarbonising of the downstream sector, he said.

Energy rich

Asked what an independent Scotland's position would be on exploration in the light of the IEA's recent net-zero 2050 pathway, Matheson said: "The reality is that we will continue to require oil and gas for some time". The transition needs to be "done in a managed, planned way so that we continue to deliver the energy supply going forward", he said.

But he points out that Scotland is energy rich, not only because of its oil and gas industry but also its renewable resources. The Scottish government estimates that the country has 25pc of all the wind resource in Europe. "There is no doubt that when Scotland becomes independent, the remaining parts of the UK will have a dependency on Scotland's energy supply," he said.

Although hydrogen development is at a much earlier stage than wind power, it could play a significant part in the energy transition, according to Matheson. Low-carbon blue hydrogen — which is produced by converting natural gas, with the CO2 arising from the process stored — could be supplied at scale and at a relatively low cost, enabling Scotland to establish a hydrogen economy fairly quickly, he said. Combined with steady growth in the medium term of green hydrogen — which is produced using renewable power — it could provide a real opportunity for Scotland to capitalise on the green economy, he said. Scotland has its own target to produce 5GW of low-carbon hydrogen by 2030, which Matheson thinks is achievable.

By Caroline Varin