Backing for Scottish green freeport and investment zones

The Treasury spending review has provided investment certainty for the Inverness and Cromarty Firth Green Freeport (ICFGF) and Aberdeen's Energy Transition Zone (ETZ), project backers say. Alongside a significant boost to nuclear energy spending[1], the Treasury also announced it has accepted the full business case for the ICFGF proposal[2]. The previous Conservative government selected bids from ICFGF[3] and the Forth Green Freeport[4] in 2023 after a competitive process which saw the Port of Aberdeen miss out[5].

The ICFGF consortium is made up of port facilities across northern Scotland, including the Port of Nigg[6], Port of Cromarty Firth[7] and Ardersier Port[8].

(C) Supplied by Ross Creative CommunA floating offshore wind turbine at the Port of Nigg.

The UK and Scottish governments are aiming to attract billions of pounds of investment into the port facilities to facilitate offshore wind deployment[9]. Labour's spending review also provided certainty for investment zones in Scotland established under the previous Conservative government. Both the green freeports[10] and investment zones[11] provide special tax incentives and other benefits, like customs rules and grant funding, as part of government efforts to attract investment and promote economic growth.

Inverness and Cromarty Firth Green Freeport

According to the ICFGF, projects associated with the freeport, such as plans for a ?350m high voltage cable factory[12], are expected to generate more than ?6bn of private sector investment and create up to 18,300 jobs.

ICFGF chief executive Calum MacPherson said the granting of the full business case for the freeport bid is a "pivotal moment" in a complex administrative process that has been "five years in the making". "I would like to thank all our stakeholders and advocates for their support, drive and determination to help Inverness and Cromarty Firth Green Freeport reach this incredible milestone," MacPherson said.

(C) Supplied by ICFGFICFGF chief executive Calum MacPherson.

The Treasury announcement also unlocks ?25m in seed funding, which MacPherson said will be used to support significant infrastructure projects at ICFGF partner ports. "While this moment is one worth celebrating, we should also reflect on what has already been achieved before we have reached this point in the process," MacPherson added.

"Inward investment is happening. Jobs have been created. The local supply chain is growing.

"Inverness and Cromarty Firth Green Freeport is already delivering on its pledge to capitalise on this once in a generation opportunity, and this confirmation by government only adds to our ability to do that."

Aberdeen's Energy Transition Zone

The spending review also reaffirmed the government's commitment to several regional investment zones across Scotland. This includes ?160 million each over 10 years for investment zones in the north-east of Scotland and in the Glasgow city region[13]. The Treasury confirmed the proposed North East Scotland Investment Zone will centre on sites in Aberdeen and Aberdeenshire, including the ETZ[14].

With a focus on floating wind, green hydrogen and digital technology, ETZ backers expect to generate over ?220m of initial private sector investment and create over 8,000 jobs.

(C) Image: Ironside FarrarConcept images of the proposed Energy Transition Zone in Aberdeen.

North East Scotland Investment Zone steering group chair Sir Ian Wood said confirmation of the ETZ as the focal point for the investment zone is "very welcome". "The region's economic partners have been working closely with both the Scottish and UK governments to develop this very important policy which will position the zone and wider region as a globally recognised supply chain hub of energy excellence and one of the most attractive locations in the UK for investment in low carbon technologies," Sir Ian said. In addition, the North Sea industry stalwart welcomed "critical development funding" included in the spending review for the Acorn carbon capture and storage project at Peterhead[15].

"The region's economic partners are longstanding advocates of this transformational project and it is very encouraging to see its importance being recognised," Sir Ian said. "All efforts must be made to fully realise Acorn's potential and ensure the unlocking of significant job creation and investment for the north-east of Scotland."

Green freeports and ETZ criticism

However, it has not been all plain sailing for the ICFGF and ETZ backers. The Scottish government was accused of "dodgy sums" last year after it emerged that the number of jobs created from the country's two green freeports[16] would fall well short of initial estimates.

Researchers have also raised concerns about a lack of transparency in designating freeports in Scotland and England[17] and fears they could lead to job losses in communities outside the designated areas[18].

Meanwhile, the developers of Aberdeen's ETZ have also encountered pushback from local residents[19] in the Torry area amid concerns about flooding risks and the loss of local parks[20].

References

1. ^ significant boost to nuclear energy spending (www.energyvoice.com)
2. ^ ICFGF proposal (greenfreeport.scot)
3. ^ government selected bids from ICFGF (www.energyvoice.com)
4. ^ Forth Green Freeport (www.energyvoice.com)
5. ^ competitive process which saw the Port of Aberdeen miss out (www.pressandjournal.co.uk)
6. ^ Port of Nigg (www.energyvoice.com)
7. ^ Port of Cromarty Firth (www.energyvoice.com)
8. ^ Ardersier Port (www.energyvoice.com)
9. ^ aiming to attract billions of pounds of investment into the port facilities to facilitate offshore wind deployment (www.energyvoice.com)
10. ^ green freeports (www.gov.uk)
11. ^ investment zones (www.gov.scot)
12. ^ plans for a ?350m high voltage cable factory (www.energyvoice.com)
13. ^ Glasgow city region (glasgowcityregion.co.uk)
14. ^ ETZ (etzltd.com)
15. ^ spending review for the Acorn carbon capture and storage project at Peterhead (www.energyvoice.com)
16. ^ accused of "dodgy sums" last year after it emerged that the number of jobs created from the country's two green freeports (www.energyvoice.com)
17. ^ lack of transparency in designating freeports in Scotland and England (journals.sagepub.com)
18. ^ could lead to job losses in communities outside the designated areas (ifs.org.uk)
19. ^ encountered pushback from local residents (www.pressandjournal.co.uk)
20. ^ loss of local parks (www.lse.ac.uk)