Climate Change Plan: monitoring report 2025

5. Chapter 4: Industry

5.1 Part A – Overview of sector

The outturn emission statistics for 2022 (published in 2024) show a position of 8.8 MtCO2e.

The CCPu sets out the following two policy outcomes for the sector, the indicators for which are summarised below:

Scotland’s industrial sector will be on a managed pathway to decarbonisation, whilst remaining highly competitive and on a sustainable growth trajectory.	On Track	Off Track	Too Early to Say
Industrial energy productivity (£GVAm per GWh)	-	X	-
Industrial emissions intensity (tCO2e per £GVAm)	-	X	-

Technologies critical to further industrial emissions reduction (such as carbon capture and storage and production and injection of hydrogen into the gas grid) are operating at commercial scale by 2030.	On Track	Off Track	Too Early to Say
% of Scottish gas demand accounted for by biomethane and hydrogen blended into the gas network	-	-	X

Just Transition and Cross Economy Impacts

We wish to understand and report on the broader just transition and cross-economy impacts of our emissions reduction activities in addition to these sector specific policy outcomes and indicators. To do this, in this report we use data from the Office of National Statistics (ONS): Low Carbon Renewable Energy Economy (LCREE) publication. The LCREE data presented in this report is based on survey data of businesses which perform economic activities that deliver goods and services that are likely to help generate lower emissions of greenhouse gases, for example low carbon electricity, low emission vehicles and low carbon services.

The LCREE indicator is narrowly defined and, while useful within its limited scope, does not give us the full picture of the impacts on workforce, employers and communities and progress towards a just transition.

Over the next year, we will work to develop a more meaningful set of success outcomes and indicators aimed at tracking the impacts of our policies on a just transition to net zero, which will inform our next CCP.

Sector commentary on progress

There has been a considerable decline in Scotland’s industrial emissions since 1990, falling by 55% (to 8.8 MtCO2e) between 1990 and 2022. Research estimates that emissions from Scotland’s large industrial sites could feasibly reduce by 80% or more by 2045, while maintaining output.

In 2021, 22% of total Scottish GHG emissions came from the industry envelope. This remained constant in 2022. For 2022, 75% of emissions originated from combustion (i.e. energy), with the remaining 25% coming from industrial processes (chemical/mineral/metal production processes).

Our CCPu estimates that by 2032 industrial emissions need to decrease by 43% compared to 2018 levels to meet Scotland’s climate change targets, whilst ensuring Scottish industry remains globally sustainable and competitive. The latest data for 2022 suggest annual industrial emissions had reduced by 18% against 2018 levels (8.8 MtCO2e from 10.8 MtCO2e). However, caution should be made when interpreting the longer-term implications of this, given the substantial impact the COVID-19 pandemic had on the Scottish economy and overall emissions. A further reduction of 2.6 MtCO2e from 2022 levels would be required to meet the 2032 target of 6.1 MtCO2e, however large uncertainties exist around the immediate emissions trajectory.

The balance of reserved and devolved responsibilities for industrial decarbonisation means that progress is often dependent on UK Government and/or international policy and markets. This year will see the publication of the UK Government's Invest 2035 Industrial Strategy and Industrial Decarbonisation Strategy. The final content of these strategies will have a material impact on Scotland's decarbonisation capabilities. Additionally, we will engage closely with UK Government on the next iteration of funding support for industrial decarbonisation projects to ensure it is relevant and works for Scottish industry. This collaboration will be essential to creating effective incentives across the UK economy for decarbonising industry while ensuring that the specific interests and needs of Scottish manufacturers are sufficiently represented.

Additionally, UK Government decision-making on where to focus its support to develop Carbon Capture Utilisation and Storage (CCUS) and the lack of clarity this is delivering for Scottish projects, has direct implications on Scotland's ability to reduce emissions and realise its net zero objectives and economic ambitions. While the UK Government has committed to spending £22 billion on Track-1 clusters in England, there remains no clear timeline for financial support for the Acorn Project and Scottish Cluster.

It is essential to provide support for our manufacturing base, ensuring that decarbonisation is achieved through transformation rather than deindustrialisation. The Climate Change Committee has identified that the largest contributor to industrial decarbonisation will be from electrification of industrial heat processes and the UK Government are establishing policy following their response to the Call for Evidence on Industrial Electrification. Therefore, supporting electrification where this offers the most commercially viable and sustainable method of decarbonisation and enabling Scottish industry to benefit from flexible demand opportunities, or proposed market reform, is a significant policy focus over the coming years.

Significant parts of the industrial sector are subject to the UK Emissions Trading Scheme (ETS), which remains the key carbon pricing tool across the UK. The scheme is developed and managed by the UK ETS Authority, comprising of the Scottish Government, UK Government, Welsh Government, and the Department for Agriculture, Environment and Rural Affairs for Northern Ireland. Since the UK ETS started in 2021, the Authority has made substantial changes to strengthen the scheme, including through better alignment with net zero and Just Transition objectives by strengthening the overall cap and increasing the proportion of free allocations under industry cap. The Authority has also consulted on markets and free allocations policy, and on further expansion of the ETS to new sectors, such as maritime, energy from waste and greenhouse gas removals. The Authority is working to publish responses to this consultation in due course. Lastly, the Authority has announced its intention to continue the UK ETS until 2050, so it remains a key part of Scotland’s climate policy toolkit for the future.

Developments in Monitoring Arrangements Since Last Report

There have been no changes to the methodology since the last report.

5.2 Part B - Progress to Policy Outcome Indicators

Policy Outcome: Cross-sectoral social and economic

Indicator: FTE employment in Low Carbon Renewable Energy Economy Indicator

On-Track Assessment (Milestones/Targets): Year-to-year change

Most Recent Data: 2022

Data Source(s): Low Carbon and Renewable Energy Estimates, Office of National Statistics

Assessment: Too Early to Say

Commentary:

• In 2022, the Scottish low carbon renewable energy economy (LCREE) sectors were estimated to provide 25,700 FTE jobs.
• The estimates of LCREE are based on a relatively small sample of businesses and hence are subject to a wide confidence interval.
• Scottish LCREE employment in 2022 is lower than in 2021 but the difference is not statistically significant, and caution should be exercised when interpreting year on year changes due to a high degree of uncertainty in estimates.

Source: Office of National Statistics (ONS) Low Carbon and Renewable Energy Economy Estimates

• LCREE only shows employment in roles in Industries directly involved in the transition to Net Zero.
• The Office for National Statistics (ONS) also releases experimental statistics on a wider perspective of green activity in the economy with their experimental estimates of green jobs.
• These statistics reflect green activities in both LCREE and non-LCREE sectors. The latest publication was in March 2024.
• This found that 19% of working adults in Great Britain described any part of their job as green in a survey carried out in January 2024.
• UK employment in green jobs was estimated to have been around 640,000 full-time equivalents (FTEs) in 2022, an increase of 8.4% compared to 2021.
• In contrast, three industries accounted for more than 62% of total UK emissions and only 14% of all UK employees in 2022. These were the electricity, gas and air conditioning industry, manufacturing, and the transportation and storage industry.
• When looking at greenhouse gas emissions per employee, the highest figures were found for the electricity and gas sector, followed by the mining and quarrying sector and the agriculture, forestry, and fishing sector.

Policy Outcome: 1

Indicator: Industrial energy productivity (£GVAm per GWh)

On-Track Assessment (Milestones/Targets): [Increase 30% by 2032]²

Most Recent Data: 2022

Data Source(s): DESNZ sub-national energy consumption statistics, DESNZ Energy

Consumption in the UK statistics, Scottish Government Quarterly National Accounts Sectoral breakdown (unpublished)

Assessment: Off track – however, it should be noted that there is a high level of uncertainty with this assessment rating. Fundamental decisions on the Scottish CCUS Cluster status and UK ETS could have a material impact on the assessment of this indicator.

Commentary:

• Industrial GVA comprises the manufacturing, construction, and mining sectors.
• Industrial energy productivity in Scotland (the GVA obtained through each GWh of energy used in the industrial sector) grew steadily, by over 50%, from 2005-2015, followed by a 6% decline over the next two years.
• Despite a year-on-year decrease of 9% in 2020 due to the COVID-19 pandemic, the indicator recovered in 2021 with a 19% increase.
• Compared to the previous year, 2022 saw a decrease of 3%. This was driven by a larger increase in industrial energy consumption (6%) than in industrial GVA (2%).
• Compared to the 2015 baseline year industrial energy productivity has increased by 6% in 2022, although this lower than the 10% increase on the baseline in 2021.
• Industrial GVA increased 12% over the period 2005 to 2022, the second highest level after 2015.
• Industrial energy consumption saw a 6% increase in 2022 compared to 2021, however remained lower when compared to 2005 by 31%.
• Improvements on this indicator are likely to be stepped, or lumpy, rather than gradual year-year changes, as success depends on substantial process changes at a small number of large sites. We will continue to review the suitability of the indicators used to reflect success in the sector and refine these as needed.

Policy Outcome: 1

Indicator: Industrial emissions intensity (tCO2e per £GVAm)

On-Track Assessment (Milestones/Targets): [Reduce 30% by 2032]³

Most Recent Data: 2022

Data Source(s): Scottish Government Greenhouse Gas Emissions publication,

Scottish Government Quarterly National Accounts Sectoral breakdown (unpublished)

Assessment: Off track – however, it should be noted that there is a high level of uncertainty with this assessment rating. Fundamental decisions on the Acorn Project and the Scottish CCUS Cluster status and UK ETS could have a material impact on the assessment of this indicator.

Commentary:

• Industrial emissions intensity in Scotland (the volume of emissions produced through each £1m of GVA in the industrial sector) fell by 43% 2005- 2015, rose 10% in 2017 compared to 2015, but fell again in the following years to 2019, by 7%.
• Year-on-year industrial emissions intensity rose again by 6% in 2020 reflecting a large decrease in overall GVA without an equivalent decline in emissions but subsequently recovered in 2021 with a 16% decline.
• Industrial emissions intensity continued to decline in 2022, with a year-on-year decrease of 3%. This was driven by increasing industrial GVA while industrial emissions remained flat between 2021 and 2022.
• Improvements on this indicator are likely to be stepped, or lumpy, rather than gradual year-year changes, as success depends on substantial process changes at a small number of large sites.
• Compared to the 2015 baseline year industrial emissions intensity has decreased by 12% in 2022.
• Total industrial emissions fell by 43% between 2005 and 2022. This is reassuring given the period 2014-2017 saw continuous year-on-year rises in industrial emissions before falling by 19% between 2017 and 2022.
• We will continue to review the suitability of the indicators used to reflect success in the sector and refine these as needed.

Policy Outcome: 2

Indicator: % of Scottish gas demand accounted for by biomethane, and hydrogen blended into the gas network.

On-Track Assessment (Milestones/Targets): Based on Trend

Data Source(s): Scottish Gas Network (SGN); Department for Energy Security and Net Zero (DESNZ) Sub-national Gas Consumption Statistics

Assessment: Too early to say

Commentary:

• In 2023, 1.8% of Scottish gas demand was accounted for by biomethane blended into the gas grid, up from 0.3% in 2015, but a decrease on the 2.1% figure recorded for 2022.
• Although moderate, this longer-term growth in biomethane levels has contributed to a lower emissions intensity of the gas grid.
• The most recent data shows that there was 126 GWh of biomethane injected into the SGN in 2015 and 764 GWh in 2023, a 506% increase on 2015.
• Data for 2024 biomethane injections suggest that biomethane injection rates may have risen, with 1,054 GWh being injected into the SGN. This represents a 735% increase from 2015. This is likely to result in a larger percentage of Scottish gas demand being accounted for by biomethane in 2024 than in 2023, depending on sub-national gas consumption statistics which are due to be released by DESNZ in December 2025.
• The UK Government confirmed their ‘minded to’ policy decision to amend regulations and legislation to support hydrogen blending in 2023 – this decision provided some clarity for gas networks and hydrogen producers; however, a final decision on this is not expected until 2026.
• No hydrogen blending into the gas grid has occurred - for hydrogen, the injection of hydrogen gas into the grid requires changes by the UK Government to the Gas Safety (Management) Regulations 1996 . Decisions on the future of the UK gas grid and powers to allow blending of hydrogen are expected in 2026.
• We urge the UK Government to accelerate hydrogen blending and decisions on the role of 100% hydrogen in the gas grid currently committed to be reached in 2026 to enable our ambition to maximise volumes of renewable hydrogen in our energy system as quickly as possible.

5.3 Part C – Information on implementation of individual policies

Outcome 1: Scotland’s Industrial sector will be on a managed pathway to decarbonisation, whilst remaining highly competitive and on a sustainable growth trajectory.

Policy: The United Kingdom Emissions Trading Scheme (UK ETS): the UK ETS is a cap-and-trade system that places a market-determined price on carbon emissions, creating a cost-effective incentive for decarbonisation. The ETS represents ~19% of Scotland’s emissions, based on 2022 data, and it covers the energy-intensive industries (oil and gas, refining, manufacturing, and construction), non-renewable power generation, and short-haul aviation. The UK ETS was established on 1 January 2021 by the UK ETS Authority, which is formed of the Scottish, UK and Welsh Governments and the Department of Agriculture, Environment and Rural Affairs in Northern Ireland (DAERA) in Northern Ireland, replacing the UK’s participation in the EU ETS.

Date announced: June 2020

Progress on implementation since time of last report / CCPu: The UK ETS was established in January 2021 and is jointly administered by the four governments of the United Kingdom. Since establishment we have made a number of changes to strengthen the scheme, including better alignment with Net Zero and Just Transition objectives, with planned expansion of the scheme to other sectors such as maritime and non-pipeline transportation of CO2. We are also considering how we could include energy from waste and greenhouse gas removals into the scheme. In 2024, the Authority announced its intention to continue the ETS for the long term until at least 2050. The Authority also consulted on the future of the ETS in early 2025. Lastly, the UKG announced the implementation of a Carbon Border Adjustment Mechanism (CBAM) from 2027. The Authority has been working with HMT on how this new policy would interact with free allocations within the UK ETS for mitigating against the risk of carbon leakage– any issues related to trade and business impacts are outside the scope and agency of the ETS.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: Further policy work to strengthen the UK ETS, including scope expansion to new sectors.

Policy: Deliver an Energy Transition Fund (ETF) to provide support for a sustainable, secure, and inclusive energy transition in the North East.

Date announced: June 2020

Progress on implementation since time of last report / CCPu: All 4 funded projects are in full delivery with 2 due to complete delivery on ETF funded elements at the end of 2024-25. One project has had its funding timescales extended to the end of 2025/26 (The Energy Transition Zone) and one project has been partially successful in fulfilling its objectives.Examples of delivery progress within the four projects since last update include:

• 1. The Energy Transition Zone has delivered the new EnergyWorks site on the innovation campus in Altens Industrial Estate in Aberdeen. This Scotland-first facility for developing and manufacturing green energy technologies and the rapid scale-up of the companies. It will provide industrial and collaboration spaces alongside entrepreneurial and advanced manufacturing guidance, knowledge and support to firms based there.
• 2. The Global Underwater Hub has created 28 new roles over 2024-25 with the majority at the Aberdeen HQ. Additionally, they have supported members by enhancing access to international markets and collaboration opportunities, including creation of an Operator Forum Springboard – to allow supply chain companies direct access to Operators to share solutions.
• 3. The Net Zero Technology Transition Programme (Delivered by the Net Zero Technology Centre) has reached “Ready to Adopt” stage on all of the 7 projects developed with ETF funding support. This means the outputs are now all at a level where industry is able to adopt them into their operational working practices.
• 4. The Aberdeen Hydrogen Hub project continues to roll-out hydrogen infrastructure in the city, including supporting the fleet of hydrogen powered buses operated by First Bus.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: All projects have ongoing monitoring against agreed outcomes and outputs. These are monitored on a quarterly basis, and in some cases may extend beyond the funding timescales for the ETF itself.

Timeframe and expected next steps: One ETF supported project (the Energy Transition Zone) will continue to be funded through this route into 2025-26.

Policy: Establish and deliver a Scottish Industrial Energy Transformation Fund (SIETF) – to support the decarbonisation of industrial manufacturing.

Date announced: June 2020

Progress on implementation since time of last report / CCPu: We continue to deliver the Scottish Industrial Energy Transformation Fund to match investment that supports industry to reduce emissions and increase their competitiveness.

To date, £17 million has been offered, which will generate over £50 million investment in 28 projects across a range of sectors. The 2023 Programme for Government committed up to £9 million during 2024-25 with further investment planned.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: Each £1 of public funds is matched by over £1.75 of private, therefore, assuming full expenditure over the programme’s lifetime, SIETF could leverage private investment amounting to £90 million+ over 30 Scottish industrial sites. Analysis indicates that SIETF has the potential to save over 100,000 tCO2e per year.

In addition to incentivising investment and reducing industrial emissions, SIETF has the potential to deliver c£14m of savings per annum to energy costs from 2026

Timeframe and expected next steps: SIETF opened to Expressions of Interest (EoI) in March 2025 for projects seeking funding in 2025/26.

Scottish Ministers have agreed to liaise with UK Government Ministers on the development, design, and delivery of future industrial decarbonisation programmes.

Policy: Making Scotland’s Future: multi-faceted programme will boost manufacturing productivity, innovation, and competitiveness, supporting manufacturing businesses to make the transition to net zero and realise the opportunities of a low carbon economy.

Date announced: 2020-21 PfG

Progress on implementation since time of last report / CCPu: The programme framework refresh was successfully implemented, and the inclusion of a Just Transition and Net Zero theme was adopted amongst partners.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: The delivery of the National Manufacturing Institute Scotland (NMIS) flagship facility was a key milestone for the Programme and NMIS continues to be central to the delivery of our goals. Indicators and milestones vary across Making Scotland Future partners and their individual projects. The emphasis is on the collaborative nature of the programme, helping partners to work together to help realise the key priorities of the sector.

Timeframe and expected next steps: We will consider refreshing the programme to align the new strategy with the current strategies relevant to manufacturing in place within Scotland, including the Innovation Strategy and the Green Industrial Strategy. The new UK Government Industrial Strategy is also expected to be published in 2025.

Policy: Low Carbon Manufacturing Challenge Fund: to support innovation in low carbon technology, products, and processes. This will be delivered as a Research and development scheme with focus on implementing product circularity through design, reducing product/process waste and reducing emissions through product lifecycle

Date announced: 2020-21 PfG

Progress on implementation since time of last report / CCPu: The Fund was closed to further expressions of interest in January 2024 as a result of the need to make budgetary savings.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: projects of over £0.5 million the gross impacts of the project are estimated, in particular Gross Value Added (GVA) and employment. Additionality adjustments are then made to drive the net impacts of each intervention. Impact ratio (net GVA per £1 of support) cost per job created or safeguarded. As of 30th of April 2024, 744.5 jobs paying the real living wage to date, with a total forecast of 817.5 jobs anticipated as a result of the fund; 117,020.73 tonnes of carbon savings, with a total forecast of 117,023.73 tonnes of carbon savings anticipated as a result of the fund; and Capital investment to date of £28,658,606, forecasted to reach £33,164,321.

Timeframe and expected next steps: Scottish Enterprise has been managing the contracts for awarded projects from alternative budgets – the length of these will vary across projects until the end of FY 2025/26.

Policy: The Renewable Heat Incentive (RHI) is a GB-wide scheme created by the UK Government (with the agreement of the Scottish Government).

Date announced: August 2020

Progress on implementation since time of last report / CCPu: 1,136.9 MW of accredited capacity under the non-domestic RHI (NDRHI) between November 2011 and March 2024.⁴

1,829 GWh of heat had been paid for between April 2014 and March 2024 under the domestic RHI scheme in Scotland.⁵

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: The domestic RHI closed from 31 March 2022.⁶ The non-domestic RHI scheme in Great Britain closed to all new applications for accreditation on 31 March 2021⁷, with some applicants able to apply up to 31 March 2023 under particular circumstances.

Policy: Scottish Industrial Decarbonisation Partnership (SIDP): Scottish Government convened cross-sector energy-intensive industrial (EII) stakeholder forum with representatives from manufacturing sites. Initial objectives: bring together other initiatives; build a shared narrative between government/industry on decarbonisation’ and disseminate best practice

Date announced:CCPu

Progress on implementation since time of last report / CCPu: SIDP development was stopped because many of the proposed co-ordination or convening functions began to be carried out by other partnerships or groups. The NECCUS alliance of industry government and experts which is driving changes needed to cut industrial carbon emissions, and the Grangemouth Future Industry Board (GFIB) continue to capture industry and wider views and commission vital evidence.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: The proposal’s purpose including for public engagement and a leadership role with wider stakeholders is under review as industrial decarbonisation policy develops during 2025, noting how other partnerships operate in this area in both Scottish and UK contexts.

Policy: Deliver a Net Zero Transition Managers Programme to embed Managers in

organisations tasked with identifying, quantifying, and recommending decarbonisation opportunities for the business.

Date announced:CCPu

Progress on implementation since time of last report / CCPu: Programme development was paused following initial engagement with partners from Scotland’s food and drink sector. The challenges for industrial decarbonisation workforce planning are set out in the Industrial Decarbonisation Research and Innovation Centre (IDRIC) Policy Synthesis Report for Scotland 2024. Many of the skills required for industrial decarbonisation match transferrable skills prevalent in the current oil & gas and process industries, the extent to which skilled workers will be available will depend on the timing and speed of growing demand. A Robert Gordon University review on UK Offshore Energy Workforce Transferability showed over 90% of the UK’s oil and gas workforce have medium to high skills transferability and are well positioned to work in adjacent energy sectors. We are working with the energy sector to plan for a multi-skilled workforce, one that can benefit from opportunities across the energy system. This includes enabling skilled offshore workers to carry their experience and expertise into different roles as our energy sector evolves.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: Feedback from industry will continue to inform policy development to tackle the challenges which manufacturing businesses face when raising capacity to design then deliver site-specific industrial decarbonisation projects.

Policy: Establish a Grangemouth Future Industry Board (GFIB) – forum to coordinate public sector initiatives on growing economic activity at the Grangemouth industrial cluster, whilst supporting its transition to our low carbon future.

Date announced: 2020-21 PfG

Progress on implementation since time of last report / CCPu: To formalise collaboration on Grangemouth between the Scottish and UK Governments on Grangemouth, GFIB is now co-chaired by the Cabinet Secretary for Net Zero and Energy, Gillian Martin MSP, and the Secretary of State for Energy Security and Net Zero, Rt. Hon. Ed Miliband MSP. The membership of the group has also expanded to include more industry representation. The draft Grangemouth Just Transition Plan has recently finished its public consultation. Consultation responses will be analysed and feed into recommendations in the final plan.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: The Grangemouth Just Transition Plan is due for publication later this year.

Timeframe and expected next steps: GFIB to take ownership of, and drive, Grangemouth Just Transition Plan actions, including advising on deployment of Just Transition Fund.

Policy: Develop policy on providing market-benefit for Scottish industries that invest to decarbonise production.

Date announced:CCPu

Progress on implementation since time of last report / CCPu: In December 2023, the UK Government outlined its intention to implement a carbon border adjustment mechanism (CBAM) by 2027. We remain engaged with the UK Government on related impacts on Scottish production including products standards.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: Sector or product specific benchmarking is noted in 2021 Scottish Government research^[28]

Timeframe and expected next steps: We will focus on promoting lower carbon intensity production in Scotland whilst liaising with UK Government who will consult on low-carbon products (classifications and embodied emissions) during 2025.

Policy: Green Jobs Fund, to help businesses create new, green jobs, working with enterprise agencies to fund businesses that provide sustainable or low carbon products and services to help them develop, grow, and create jobs. Further funding will help to ensure that businesses and supply chains across Scotland can capitalise on our investment in low carbon infrastructure such as the decarbonisation of heating and green transport.

Date announced: 2020-21 PfG

Progress on implementation since time of last report / CCPu: Published forecast figures on green job numbers are derived from projects where funding from the Green Jobs Fund has already been agreed and, in financial year 2024-25, support will continue for projects where commitments have been contractually agreed. Enterprise Agencies may have deployed further funds available beyond this to support projects aligned with the objectives of the Green Jobs Fund.

Latest figures to be quoted are: Since the Fund’s creation, between the Enterprise Agencies and Scottish Ministers, 122 projects have been supported with grant funding of £38.7 million through the Green Jobs Fund. Figures provided by the recipients of these awards estimated that these projects will support up to 7354 jobs over the life of the individual projects.

The Green Jobs Fund has been discontinued. In addition to financial pressures associated with its continuation, the Fund formed a relatively small part of the Scottish Government’s broader investment in the transition to net zero. This includes many institutions, funding packages and investment vehicles which provide advice, support, and financial assistance for businesses at the forefront to building Scotland’s green economy. The Green Industrial Strategy provides further strategic direction on how such investment supports the development, growth and scale-up of existing and new businesses seeking to take advantage of the global opportunities of the transition.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: ONS release of their “Green jobs update, current and upcoming work: March 2023” on the 13th March 2023, defined a green job as: “Employment in an activity that contributes to protecting or restoring the environment, including those that mitigate or adapt to climate change”. Estimates are provided using three approaches: industry-based, occupation-based, and firm-based.

Despite the Fund being discontinued, Scottish Ministers will of course retain an interest in tracking the creation of green jobs.

Timeframe and expected next steps: N/A

Policy: Seizing the economic opportunity, we will work across government, enterprise agencies and the innovation system to identify strengths that can be built on as part of the decarbonisation journey, for example on The Clyde Mission and continued support for the Michelin Scotland Innovation Parc (MSIP).

Date announced:CCPu

Progress on implementation since time of last report / CCPu: Glasgow City Region (GCR) partners took on leadership of Clyde Mission in 2023. In the time since the transfer, GCR have appointed a Head of Place to oversee this work and commissioned work towards the development of a Masterplan for the area (funded by £1.5 million from Scottish Government). Work on developing the Heat Decarbonisation Fund (funded by £25 million from Scottish Government) is ongoing with the fund expected to be launched during 2025/26.

Scottish technical textiles manufacturer Wilkie formally announced its acquisition of the majority shareholding of MSIP on 10 January with Scottish Enterprise remaining as a minority shareholder in support until 2026. This is key to a significant planned investment by Wilkie and a tripling of the workforce over 5 years. Wilkie has committed to operating within the ethos of MSIP and seeks to use the facilities on site such as the Innovation Hub, Skills Academy, and on-site renewable energy to support innovation and new technologies in textiles.

MSIP has also recently concluded its 5th Business Accelerator cohort, providing access to skills, knowledge, networks, and advice for another 12 new businesses that are developing a range of future-thinking products and services, including sustainable mobility, renewable energy, robotics & manufacturing, sustainable built environment, AI, IoT, data, and procurement.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these:

Clyde Mission: Heat Decarbonisation Fund to be designed and launched by Glasgow City Region – ongoing.

MSIP: 5 Business Accelerator Cohort – completed

Timeframe and expected next steps:

Clyde Mission: Heat Decarbonisation Fund to be designed and launched by Glasgow City Region – 2025-26.

MSIP: Wilkie to be operational at MSIP – 2025-26

MSIP: Wilkie has indicated an intention to adapt buildings to the south of the site to house its operations and to connect to the various renewable energy opportunities of the MSIP site including energy from the waste plant and installation of Solar panels – 2025/26 (indicative)

Outcome 2: Technologies critical to further industrial emissions reduction (such as carbon capture and storage and production and injection of hydrogen into the gas grid) are operating at commercial scale by 2030

Policy: ACORN CCS Project: support the delivery of the Carbon Capture Storage (CCS) and Hydrogen capability at St. Fergus Gas Processing complex by 2025.

Date announced: CCP 2018

Progress on implementation since time of last report / CCPu:

The Scottish Government has provided funding and policy support to the Acorn CCS project positioned at St. Fergus, Aberdeenshire, through its feasibility and development phases.

The Scottish Government is supporting the National Gas SCO₂T Connect project with £2m to explore the technical feasibility and viability of repurposing the Feeder 10 pipeline for transporting CO2 from the central belt to the Acorn Project. This funding will accelerate this project which is a critical element in the deployment of the Acorn project and Scottish Cluster.

In December 2024, the new UK Government stated that the previous UK Government’s ambition to capture and store 20-30 Mtpa CO2 by 2030 is ‘no longer achievable’ due to them having left no adequately funded policy proposal for how to achieve this. They also stated, however, that UKG are deeply supportive of future CCUS deployment, and that further decisions, including on Track-2, will be announced in due course. It is anticipated that a further announcement will be received at the comprehensive spending review in late spring 2025.

No hydrogen blending into the gas grid has occurred - for hydrogen, the injection of hydrogen gas into the grid requires changes by the UK Government to the Gas Safety (Management) Regulations 1996 which have not been changed yet. Decisions on the future of the UK gas grid and powers to allow blending of hydrogen are expected in 2026.

Hydrogen production at St Fergus Gas Processing complex is dependent on a positive decision from UKG on CCUS Cluster 2 and there remains no clear timeline for financial support for the Acorn Project and Scottish Cluster

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these:

No milestones have been set; the UK Government are dictating the pace of deployment. The Scottish Government are working constructively with the new UK Government, pressing for a meaningful Track 2 update, to ensure the Acorn Project and Scottish Cluster secure the fastest possible deployment.

Timeframe and expected next steps:

Continued support of Acorn and the Scottish Cluster, aiming for CCS to be functioning at Acorn by 2032.

Blue Hydrogen production from Acorn relies on CCS infrastructure being in place.

Policy: Establish and deliver a Carbon Capture and Utilisation (CCU) Challenge Fund.

Date announced: 2020-21 PfG

Progress on implementation since time of last report / CCPu:

We made available up to £5 million of financial support for Carbon Capture and Utilisation through our CO2 Utilisation Challenge Fund which ran from 2022 to 2024. No applications were received and so the money was reprioritised. As targeted market engagement did not identify a single specific reason for this lack of applications; a range of issues are thought to be potential contributors, including other funding streams in this area, industry difficulties with building project consortia and changes and challenges to the global supply chain.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A

Timeframe and expected next steps: N/A

Policy: Emerging Energy Technologies Fund – to support the development of Hydrogen, CCUS and Negative emissions technologies.

Date announced:CCPu

Progress on implementation since time of last report / CCPu: Launched in 2022, the Hydrogen Innovation Scheme (HIS) is targeted at supporting innovation under the themes of renewable hydrogen production, hydrogen storage and distribution, and the integration of hydrogen into our energy system. Since then, the HIS has awarded grants worth a total of nearly £7 million to 31 projects; most of these have now drawn to a close, with the remainder due to conclude in 2025.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: A report celebrating the successes and outputs from the HIS will be published later in 2025. In lieu of opening the Green Hydrogen Fund by late 2023 as originally planned, we worked with Scottish Enterprise to assess funding proposals on a case-by-case basis, which saw a £3.1 million grant award to the Storegga Speyside Hydrogen Project. We later worked with SE to develop arrangements for a funding call that aims to provide support to strategically important renewable production projects and projects which will help to develop related supply chain, transport, and storage infrastructure.

Timeframe and expected next steps: The 2024-25 funding call was launched in September 2024; grant awards will be publicly announced in spring 2025. Planning to conduct a similar funding call within 2025-26 is underway.

Policy: Carbon Capture Utilisation and Storage (CCUS): work closely with the UK Government to achieve commercial, policy and regulatory frameworks required to support CCUS at scale in the UK.

Date announced: 2020-21

Progress on implementation since time of last report / CCPu:

The Scottish Government continues to work closely with the UK Government at official and Ministerial level, with the aim of accelerating deployment of CCUS within Scotland. A Ministerial Forum for CCUS was established, having its inaugural meeting on 18 December 2023. Policy officials have regular engagement with the UK Government Department for Energy Security and Net Zero on regulatory and policy matters related to the development of at-scale CCUS in the UK.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: No indicators set.

Timeframe and expected next steps: Officials are awaiting confirmation from UK Government colleagues of the forward plan for the Ministerial Forum following the change of UK Government.

Policy: Forums for CCUS and Blue (low carbon) Hydrogen: to bring together industry, academics, and membership organisations to promote and attract investment in CCUS and Blue Hydrogen.

Date announced: NECCUS 2019

Progress on implementation since time of last report / CCPu:

The Scottish Government has continued to work collaboratively with the Centre for Energy Policy at the University of Strathclyde, as well as to engage with IDRIC who we commissioned to produce a Policy Synthesis Report. We have also continued to support industry body NECCUS whose second annual DecarbScotland event was held at Murrayfield, Edinburgh on 1 February 2024 bringing together a national and international audience from across industry, academia, government and other membership organisations to showcase the opportunities and discuss the challenges of industrial decarbonisation, with a focus on CCUS, in Scotland. The third DecarbScotland event took place on 13 March 2025.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: No indicators set.

Timeframe and expected next steps: The Scottish Government will discuss with NECCUS their remit within the context of the Scottish Cluster over 2025. Scottish Government will co-ordinate an industry roundtable in the first half of 2025.

Policy: Evidence for CCUS and Blue Hydrogen: building the evidence base on impact of technology, regulatory and market barriers.

Date announced: 2020/21 PfG

Progress on implementation since time of last report / CCPu:

The Scottish Government continues to build our evidence base for CCUS on transport, storage, skills, infrastructure and growing international markets. A study on nearshore storage potential was conducted in 2024 to look at the potential for storage which may be under the jurisdiction of Scottish Ministers. This has been followed up by the setting up of a short life working group comprising interested agencies and subject matter experts. Scottish Government have also worked with Scottish Enterprise and the Scottish Cluster to facilitate workshops covering topics including collaboration and co-ordination, leadership, skills, and supply chain. Additionally, we commissioned IDRIC to produce an Industrial Decarbonisation Policy Synthesis Report, tailored to Scotland’s specific context. IDRIC synthesised key insights from industry experts, academic policy research and other authoritative sources, to inform SG policy development. This report was published on 10 September.in September 2024.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: No indicators set.

Timeframe and expected next steps: The Scottish Government will continue to commission relevant research projects to further build the evidence base, utilising the ClimateXChange framework where appropriate.

Policy: Strategic development of Scotland’s hydrogen economy – this is a cross-portfolio proposal that will impact on the delivery of multiple outcomes.

Date announced: Hydrogen Assessment and Policy Statement 2020, draft Hydrogen Action Plan 2022

Progress on implementation since time of last report / CCPu: Co-produced with stakeholders in the hydrogen sector, our ‘Hydrogen Export Plan: A Trading Nation - Realising Scotland's Hydrogen Potential’ plan for exports was published in November 2024. This plan aligns with our Hydrogen action plan and Green industrial strategy. It details the steps required for Scottish businesses to grasp the export opportunities hydrogen presents, as both a commodity and in the supply chain.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: N/A – There are no specific indicators in the CCPu regarding this policy.

Timeframe and expected next steps: In October 2024, we established the Scottish Hydrogen Industry Forum – Chaired by the Minister for Climate Action. This stakeholder forum provides important insight and understanding of the challenges facing this emerging sector, consideration of the potential solutions to barriers to deployment, informs developing policy, and helps the realisation of the Scottish Government’s hydrogen ambitions.

Hydrogen production capacity is growing - this year 2025-26 will see 5MW’s of installed hydrogen production capacity come on-line followed by a further 20.5MW’s in construction and coming on-line in 2026-27.

Policy: Hydrogen Demonstration: to replicate and scale-up demonstration projects and the evidence base for hydrogen-based technologies.

Date announced: Hydrogen Assessment and Policy Statement 2020, draft Hydrogen Action Plan 2021, final Hydrogen Action Plan 2022

Progress on implementation since time of last report / CCPu: The Hydrogen Innovation Scheme (HIS), launched in 2022, is providing support for the production, storage and integration of renewable hydrogen including feasibility and demonstration projects. HIS grant awards to date have totalled nearly £7m, shared across 31 projects.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these: There are no specific indicators in the CCPu.

Timeframe and expected next steps: The majority of HIS projects had concluded by the end of 2024; of those still in progress, 5 are due to draw to a close by the end of March 2025, and the remaining 2 by Autumn 2025. A HIS outputs report will be published later in 2025.