A just transition for Aberdeen and the North East: Climate Action Minister's statement to Parliament - 3 June 2025

Statement by Climate Action Minister Alasdair Allan to the Scottish Parliament on Tuesday 3 June 2025.

"Presiding Officer, Aberdeen and the North East has been a powerhouse for fifty years – as we transition from the boom years of oil and gas towards the renewables revolution on the horizon, all of us in this chamber can, I think, acknowledge the opportunities a just transition can now bring.

At the heart of this transition are our oil and gas workforce. Experienced, highly skilled workers who are passionate about their work and their industry.

These workers are the latest in a long line of people who have had opportunities to provide for their families, experience work overseas, and build a modern, successful city in Aberdeen through the oil and gas industry.

Beyond anything else, a just transition must exist primarily for them, to ensure they have good, well-paid jobs, that they can thrive in the region, and be proud to live and work there.

This statement has been prompted by the publication of the Just Transition Commission's report into Aberdeen and the North East and I thank them for their work, especially in travelling around the country and speaking to those directly impacted by the transition to net zero.

However, it would be remiss, Presiding Officer, not to acknowledge that this follows on from a concerning series of announcements affecting jobs in the region, especially in the oil and gas industry.

As the chamber will know, most of the key policy levers for the North Sea oil and gas sector, including decisions on licensing, consenting and the associated fiscal regime, are matters reserved to the UK Government and so it is not surprising that much of the report is addressed to them.

The UK Government has recently concluded several periods of consultation on key aspects of the future of the North Sea.

We, along with industry, workers and other stakeholders, are awaiting its next steps. These will be of vital importance for all aspects of the energy transition, including that of the workforce.

So, we are content to accept the headline recommendations in the Commission's report in principle. However, and as the Commission itself recognises, clarity on the direction of travel from the UK Government will be vital before we can undertake the planning, or some of the planning, that the sector needs.

This is not a process the Scottish Government can do alone.

In order to support workers and create an improved environment for investors, the UK Government needs to urgently provide stability and certainty in several key reserved areas.

Firstly, the UK Government holds the powers to act in areas of taxation for the North Sea oil and gas sector.

As such we continue to call on it to listen carefully to concerns being expressed by businesses around the impacts of its Energy Profits Levy.

The Energy Profits Levy was always supposed to be a temporary measure and we must see an end date, as it is now affecting investment and jobs in the North East.

Given that we are now seeing adverse effects of this policy, the UK Government should be considering when the earliest possible end date could be - in order to avoid more decisions like the one seen from Harbour Energy last month.

They must urgently work with industry, through its recent consultation which closed on the 28th May and more widely, to set out a stable, long-term fiscal regime for the North Sea.

The aim must be to give the offshore energy sector much needed certainty and treat it fairly alongside other parts of the UK economy.

Secondly, decisions on licensing and consenting of North Sea oil and gas projects which are also of course reserved to the UK Government.

We continue to call on it to approach these decisions on a rigorously evidence-led, case by case, basis – with climate compatibility and energy security as key considerations.

The UK Government needs to bring forward its finalised positions from recent consultations on the future regulatory regimes as soon as possible, to provide businesses and workers with much needed certainty and stability. 

And thirdly, it is essential that the UK Government provides clarity and certainty for the Acorn Project in the upcoming Spending Review.

A positive final decision on Acorn and the Scottish Cluster, including announcing a full funding package and clear timeline to achieve Final Investment Decision, is required so that investors can continue their work developing this vital project.

We stand ready to work constructively with the UK Government, and to increase our funding for Acorn, if the UK Government commits. We will work with them and industry to ensure the fastest possible deployment of the Acorn Project and Scottish Cluster, so that a just transition for our energy workforce can be secured.

While clarity from the UK Government is needed in key areas that I've mentioned, it will not stop us from taking the actions that are possible, within our devolved competence.

Our £500 million Just Transition Fund for the North East and Moray is currently open for new applications, with £8.5 million of new funding available this year. I would once again call on the UK Government to match our investment in this area.

In the next Parliament, we will meet the remaining commitment for the Fund and work with partners to deliver strategic investment in the region.

As part of the Fund we've been prioritising skills investments, through the industry-led offshore energy skills passport and the Energy Transition Skills Hub.

We have also supported key projects in the region through our Energy Transition Fund and are currently working with UK Government to develop a new Regional Skills Pilot scheme for Aberdeen City and Aberdeenshire.

The expansion of offshore wind represents a significant opportunity to create thousands of high-quality jobs, offering opportunities for those entering the job market for the first time and those who want or need to change careers, including as part of a just transition.

We are investing up to £500 million over 5 years to support market certainty, create a highly productive, competitive offshore wind economy, and to support thousands of jobs.

We are providing funding to colleges in 2025-26 to establish an Offshore Wind Skills Programme, helping to create region-specific training hubs for offshore wind skills, and have convened a short-life working group with industry and public sector partners to develop and deliver an evidence-based offshore wind skills action plan at pace.

This activity by the Scottish Government could be even more impactful with the appropriate UK Government actions that I've mentioned.

To secure project delivery in Scotland, as well as investor and supply chain confidence, the UK Government must prioritise the critical reforms necessary to improve the Contracts for Difference scheme, make transmission charges fairer, and bring forward grid connection dates. 

We're also increasing at this end, the Scottish Government end, the impact of the UK Government investment that is being provided.

The North East Investment Zone will unlock a funding package of up to £160 million from UK Government over ten years to invest in a range of interventions designed to attract investment, boost innovation and create jobs.

To conclude Presiding Officer, the Scottish Government as well as providing a package of Non-Domestic Rates Retention at the sites which the Regional Economic Partnership can use to further invest in the Zone and associated economic infrastructure.

In addition to all that of course, the Scottish and UK Governments have worked together on the Aberdeen City Region Deal, on initiatives like the offshore energy skills passport, and now on the Investment Zones. We know that joint working will be essential to unlock the potential of the North East and the city of Aberdeen during this transition.

As I began by saying, Presiding Officer, all of us can acknowledge the opportunities that can be unlocked through a just transition, and the Scottish Government will continue to take forward efforts within our power as we await clarity from the UK Government on its next steps.

I look forward to contributions from members and their support in matching our calls to UK Government and expressing our collective commitment to the industry and workforce that has made Aberdeen and the North East so vitally economically important to our country."