UK and Scottish governments seal the green freeports deal

The UK and Scottish governments have reached a partnership agreement to establish two green freeports in Scotland, reflecting the country’s net-zero aspirations.

As described, the green freeport model in Scotland adapts the UK Government’s freeport model to fit the distinct needs and interests of the country’s net-zero economy.

The idea, unveiled in January 2021, is expected to encourage the adoption of best practices for businesses and will be attached to commitments to net-zero, fair work criteria and ensuring payment of the living wage.

According to the Scottish government, following robust discussions in recent months, the parties have agreed:

• to establish a joint applicant prospectus, with Ministers and officials from both the Scottish and UK government having an equal say throughout the assessment and selection process;
• that applicants in Scotland are required to contribute towards a just transition to net-zero emissions by 2045, delivering net-zero benefits and creating new green jobs; and
• that applicants in Scotland are required to set out how they will support high-quality employment opportunities that offer good salaries and conditions, and how fair work practices will be embedded in the green freeport area.

Furthermore, Ministers have agreed that a joint offer set out in a prospectus offers the maximum benefits for the Scottish economy as both governments will be able to deliver tax reliefs and other incentives through a combination of devolved and reserved powers.

As a result of the recent negotiations, UK Ministers are expected to provide up to £52 million (around $70.71 million) in seed funding to help establish green freeports in Scotland which is in line with funding offered to freeports across England.

The governments said that the next steps in the process will be set out by Ministers as soon as possible while finalised joint prospectus and joint assessment process is expected to be published in March with winning bids announced over the summer.

Commenting on the agreement, Economy Secretary Kate Forbes said: “I am pleased we have been able to reach an agreement on a joint approach that recognises the distinct needs of Scotland’s economy and enshrines the Scottish Government’s commitment to achieving net-zero and embedding fair work practices through public investment.

“The Scottish Government will have an equal say on all bids, and will expect bidders to adhere to fair work practices including payment of the Real Living Wage.”

“This is a truly exciting moment for Scotland, and I am delighted we will be working together with the Scottish government to set up two new green freeports. Green freeports help inject billions into the local economy, while levelling up by creating jobs for local people, and opportunities for people all over the UK to flourish”, Secretary of State Michael Gove added.

Green freeports – an opportunity to maximise Scotland’s renewable energy sector

The agreement between the two governments was welcomed by the Opportunity Cromarty Firth (OCF) consortium, an initiative exploring the opportunity for the Cromarty Firth to become a national strategic renewable energy hub.

The consortium which includes the Port of Cromarty Firth believes the creation of such a zone on the Firth would maximise local and Scotland-wide benefits from a pipeline of renewable energy projects and place the Highlands at the heart of the drive towards net-zero.

Speaking on behalf of OCF, Port of Cromarty Firth chief executive, Bob Buskie, said: “The award of green freeport status will ensure the successful bidder’s ability to compete on a level playing field with their counterparts in the rest of the UK. That is a key aspiration of the businesses and organisations that have been working closely together for the benefit of the region in the Opportunity Cromarty Firth consortium.”

Additionally, Aberdeen Harbour Board embraced the deal stating that the freeport in the North East of Scotland will bolster the region’s offering to the offshore renewables sector, increased freight activity, high-end manufacturing and burgeoning cruise industry.

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