Green Industrial Strategy

Part Three: Creating An Environment For Growth

Realising the economic potential of the priority opportunity areas and the green economy in Scotland as a whole requires us to create and sustain an environment that supports jobs, trade, investment, and growth. Scottish Government will make maximum use of the various tools and levers we have at our disposal, aligning them in support of the opportunities we have identified. This includes the ability to respond to new market opportunities as they arise over time.

In identifying the tools and levers which we should focus on, we have been guided by two key principles:

1. What are the most important blockers and enablers to realising the opportunities of the transition to net zero? In this, we have been guided by extensive engagement with and feedback from businesses and investors. We have listened to their priorities.

2. Where can the Scottish Government have most effect? Acknowledging our particular constitutional and fiscal circumstances and focussing on the tools and levers where our actions can have most impact, underpinned by a commitment to collaborate with others where it is in our national interest.

These principles lead us towards six key enabling factors where our actions can help to create the conditions for investment and growth. They are:

1. Supporting Investment, ensuring an investment-friendly ecosystem

2. Investing in strong research and development foundations

3. Supporting the development of a skilled workforce

4. Helping supply chain businesses to seize opportunities

5. Delivering an agile planning and consenting system

6. Delivering required housing and enabling infrastructure

Supporting Investment, Ensuring An Investment Friendly Ecosystem

To deliver this strategy we will put in place the right systems and processes and make targeted interventions to enable:

• Capital investment in the large-scale projects and infrastructure necessary to realise the opportunities of wind, hydrogen, CCUS and energy intensive industries;
• Inward investment to complement and add value to Scotland’s existing business base and fill strategic gaps in Scotland’s industrial capability and capacity;
• Investment that supports the development, growth and scale-up of existing and new businesses seeking to take advantage of the global opportunities of the transition.

Capital Investment

The domestic and global transition to net zero requires public and private investment on an unprecedented scale. Scotland’s port infrastructure offers particular opportunities and Scotland has already demonstrated it is capable of attracting global investment with, for example, the £400m private and public investment in Ardersier port which will transform the site into an energy transition facility supporting offshore wind. However, as countries across the world make the transition to net zero there is fierce competition for capital.

Building on the recommendations of the First Minister’s Investor Panel^[49], including specific recommendations on Scotwind and our hydrogen ambitions, we will take a new approach to how the Government and our agencies work with investors to attract the scale of global capital required to fully realise the economic potential of the five opportunity areas set out in this Strategy. This approach will seek to differentiate Scotland positively from other markets by being proactively ‘investor-friendly’ and using our close networks, short lines of communication and decision making and devolved powers to become a globally competitive investment destination.

We will:

1. Develop a national project pipeline of investment opportunities. Working with public and private partners, we will develop a national project pipeline of investment opportunities which provides greater clarity on expected investment risk and return and can be tailored to the needs of target investors. This will build on our approach to the offshore wind investment pipeline which includes investment opportunities in enabling infrastructure and supply chain projects driven by intelligence from our public sector delivery partners and wider market intelligence including the developer- led Strategic Investment Model. Drawing on investment market specialists from the public and private sectors, we will gather, assess and better structure existing and new investment opportunities for specific investor groups such as infrastructure investors, institutional investors and sovereign wealth funds.

2. Establish a new system across the public sector for attracting investors focused on a high-quality investor experience and journey. We will take a co-ordinated and consistent approach across the public sector to identifying, supporting and engaging with investment opportunities and investors at every stage of the investment process. This will set out clear roles and responsibilities for each public sector partner and deliver a cross sectoral approach to identifying and addressing barriers to investment at the system and project level.

3. Raise the profile of Scotland as a destination for capital investment. Initially we will host a Global Offshore Wind Investment Forum in Spring 2025 to bring together investors and developers to accelerate investment in Scotland’s offshore wind sector and associated infrastructure. Future forums may focus on investment into other clean energy/renewable opportunities.

4. Develop and test new approaches for funding, financing or risk sharing that will accelerate the deployment of infrastructure projects. We will build on our Sector Investment Readiness Assessment (SIRA) work that examines the investment readiness of different net zero sectors to ensure the business case, and justification for government intervention is clear. We will work with the Scottish National Investment Bank to consider the role of investment guarantees and underwriting. We will identify and test the use of different blended finance models for projects – there are early opportunities for blended finance pilots in emerging markets, such as natural capital. As part of the work to refresh the public sector infrastructure investment pipeline, we will continuously explore different funding models, including options for revenue finance.

Attracting Inward Investment

Scotland already has a strong track record of attracting inward investment and the evidence shows that the targeted, values driven approach adopted in our (Oct. 2020) Inward Investment Plan is working. Both the EY Attractiveness Survey and Scottish Development International’s inward investment results show Scotland as a destination of choice and the benefits that inward investment brings to the Scottish economy. EY’s most recent survey shows that, for the ninth consecutive year, Scotland is the top performing part of the UK outside London for attracting inward investment.

Scotland strong comparative advantage in attracting inward investment to renewable energy, especially offshore wind, will support the delivery of this Strategy. In 2023, Scotland attracted 25 greenfield inward investment projects in renewables, accounting for 9% of the mobile wind power projects globally and 13% of the jobs associated with these projects^[50].

The Scottish Government and our enterprise agencies will seek to attract inward investment to the five opportunity areas in a way which complements and adds value to Scotland’s existing business base and fills strategic gaps in Scotland’s green industrial capability and capacity. This includes support for the unlocking of offshore wind opportunities, such as supply chain development and attracting innovative, market leading businesses to help us develop the emerging hydrogen sector in Scotland. Scottish Development International (SDI), the international arm of Scottish Enterprise, will lead on the operational delivery of this.

Working with SDI and other key partners we will:

1. Deliver a global programme of activity to attract inward investment into Scotland – targeting leading energy transition companies in key markets with compelling propositions on why they should invest in Scotland. As part of this we will continue to evaluate inward investment policy and support, to ensure our approach is evidence-led and focused on the areas that will deliver most impact to support Scotland’s energy transition.

2. Leverage our relationship with leading investors in Scotland – we will use a cross-government approach to develop opportunities for these companies to invest further and play an important part in Scotland’s green industrial future.

3. Identify and support significant inward investment projects – we will short-list game changing inward investment projects aligned with GIS opportunity areas for coordinated government and agency support. As part of this, we will introduce a concierge service to support the delivery of the most transformational inward investment opportunities. This will see the appointment of a senior lead to work with the most significant projects, to join up government and the public sector to efficiently address barriers, negotiate on potential support packages, and drive pace in decision making and opportunity delivery. Critically, this concierge service extends into project delivery and operationalisation phase.

4. Work collaboratively with developers – we will align our inward investment activity directly to the needs of the future supply chain expanding our inward investment pipeline, with the aim of building a world class energy transitional industry in Scotland.

Company Growth Investment (Start up/ Scale Up)

Alongside the significant levels of infrastructure investment required to support the transition to net zero, a wide spectrum of private debt and equity finance will be required to start-up and scale-up the companies that will support a Just Transition.

Scotland benefits from an active system of public sector investment support for early stage and, increasingly, scale up companies. This includes interventions such as Scottish Enterprise’s Co- investment and Venture Funds and over the last 5 years additional, complementary sources of investment have been made available through the Scottish Growth Scheme, the Scottish National Investment Bank and, more recently, the British Business Bank. 48% of the Scottish National Investment Bank’s investment portfolio contributes to the shift to a net zero economy.

A well-functioning risk capital market is essential to support growing companies to generate economic impact and support the opportunity areas in this Strategy. In the UK, where almost £17bn was invested into more than 6,400 deals, Scotland remained a top performing market outside the Golden Triangle (London, the South East and East of England). The resilience of the Scottish market is displayed in its positioning as the second-best performing region, not only for investment value, but also for Venture Capital & Private Equity deal participation and spinout investment value.

Scotland performs well in terms of deals by both Angel Networks and Business Angels, particularly for early-stage investment. However, investment to support company growth and scaling is limited currently by a small market with few players, in which Scottish companies can be under-valued when they do attract equity or have to leave Scotland in order to gain investment. It is also limited by the number of companies seeking investment and we will work to further increase ambition and financial awareness in delivering this strategy.

In delivering Scottish Enterprise’s core mission of scaling innovation, and working through Scottish National Investment Bank we will:

1. Provide accessible routes to finance for start- up and scale-up companies. We will optimise deployment of public sector debt and equity instruments and improve coordination and efficiency across the system. Our aim is to support greater investment in our key opportunity areas, and we will support the Scottish National Investment Bank to deliver against its three missions and develop its strategic approach to ‘Impact Investing’ and ‘Scale up activity’.

2. Leverage our publicly funded network of entrepreneurial support and incubation. We will work with entrepreneurs and start-ups in the energy transition sector through our Tech Scaler network and ensure that where possible, we encourage equitable distribution of financial support through investment vehicles focused on diversity and inclusion priorities, such as female and minority founders.

Stornoway Port

The Scottish Government, along with Highlands and Islands Enterprise (HIE) and Comhairle nan Eilean Siar – Western Isles Council (CnES), is providing £33.7m to deliver a deepwater port in Stornoway to boost the island’s economy. The deepwater terminal, led by the Stornoway Port Authority is now complete and the new port is fully operational. As a result, by late 2025 freight capacity on the island will be significantly increased.

Alongside the deepwater port, the Scottish Government is also investing £50m through the Islands Growth Deal in a range of projects to deliver future economic opportunities for the islands, including the development of green skills, low carbon innovation and infrastructure to drive sustainable economic growth.

Supporting Strong Research And Development Foundations

Scotland’s Higher Education sector is respected across the world and the strength of our research and development was one of the factors that helped determine the selection of the five Opportunity areas described in this strategy. We recognise that action is needed to maintain a leadership position and to support our Universities to commercialise their research and maximise its impact on our green economy.

Through a triple helix approach from Government, academia and business we will:

1. Commercialise more of our university research. A partnership between government, businesses, the wider public sector and universities will maximise our research potential and translate it into new products and businesses that benefit society and our economy. Through a new Commercialisation programme linked to our National Innovation Strategy we will provide targeted, multi-year funding and support to increase the number of scalable spinouts in Scotland related to the green economy and, critically, help retain our most successful spinouts to grow and scale here in Scotland. Enterprise agencies will focus their Business R&D support on our opportunity areas and follow the same approach in leveraging sector-specific public and private sector UK and international funding.

2. Build competitive clusters of new and scaling businesses in Energy Transition. A nationwide Cluster Development Programme, developed and delivered through our enterprise agencies, will harness the combined strengths of industry, academia and the public sector to support new collaborations and provide the new market opportunities that start-ups and scaling businesses need. This programme will be benchmarked against the most successful international programmes of its type and be defined by the needs of the private sector.

Scottish Enterprise will focus explicitly on creating an internationally competitive energy transition industry in Scotland and scaling the impact of Scotland’s innovation strengths into high-growth industries of the future. A successful cluster of energy-related businesses will provide opportunities for business to collaborate and develop partnerships and opportunities for skilled staff to develop their careers and build the relationships that can spark entrepreneurial activity. This, combined with our commitment to commercialising research, should give confidence to potential investors in the quality, breadth and entrepreneurial nature of our domestic supply chain.

3. Invest in regional innovation clusters and supply chains. Through our network of Regional Economic Partnerships, enterprise agencies and regional investment commitments such Regional Growth Deals Programme, we will seek to secure the benefits of aligning current and future regional economic priorities with the opportunity areas described in this strategy. Over £270m has been committed by the Scottish Government to projects with an innovation focus through the Regional Growth Deals programme, accounting for over 14% of the overall £1.9bn funding programme. These programmes create a pipeline of future research opportunities and underpin the development of clusters that have the incentive and means to innovate.

4. Invest in foundational and applied research. The Scottish Government through the Scottish Funding Council (SFC) provides flexible funding that supports institutions to build their underpinning capacity to develop a breadth of world-leading research. We recognise that excellence in foundational research and new knowledge outputs are vital in opening up access to networks, expertise and infrastructure that help us to attract the best talent, leverage in further investment and retain a leadership position in applied research related to the energy sector. We will continue to support high-quality research and knowledge exchange through our core Scottish Funding Council grants as well as continuing to invest in strategic initiatives in opportunity areas, such as through our network of Innovation Centres and Alliances for Research Challenges.

Scottish Marine Energy Research (ScotMER)

The Scottish Marine Energy Research programme facilitates collaboration of experts from academia, industry, statutory nature conservation bodies (SNCBs), environmental nongovernmental organisations (eNGOs) and the Scottish Government (marine science, planning and licensing) to improve the evidence base around how offshore renewable energy developments may potentially affect our natural environment, socioeconomics and other users of the sea.

Hydrogen Innovation Scheme

Another opportunity area-specific example is our Hydrogen Innovation Scheme (HIS), which is supporting innovation under the themes of renewable hydrogen production, hydrogen storage and distribution, and the integration of hydrogen into our energy system. The HIS offered grants totalling almost £7m to 31 innovative projects.

The Right Workforce With The Right Skills

The availability of high quality, appropriately skilled and ambitious people is critical to the willingness of a business to start, scale and invest. Significant work is progressing to reform the education and skills system so that it is more responsive to our economic needs and ambitions, and we will continue to invest in that system and the infrastructure that supports it, including for example, schools, colleges, universities, apprenticeships and our Innovation Centres, to enable the transition to net zero as well as broader Scottish Government ambitions.

In order to create the agile skills system that the green economy demands we will:

1. Ensure the education and skills system is responsive to our green economic priorities. We have committed to developing a national approach to skills planning which will help develop a better understanding of skills needs at the national level, including skills for the net zero transition, and how we can better address them. Following the Withers Review, this action is linked explicitly to the ongoing Reform Programme for Post-school education and skills^[51] and will be complemented by strengthened regional approaches to skills planning that reflect current and future job opportunities, housing provision and other economic determinants within different areas of Scotland. This will be particularly impactful in rural, island and coastal communities, providing new opportunities for young people to live and work in these areas should they wish to do so.

2. Raise the profile of green job opportunities and support people to re-train to take on those opportunities. Careers advice is currently provided through a range of organisations and institutions, including Skills Development Scotland, Developing the Young Workforce and Third Sector organisations. We will develop a clearer, coherent careers offer for learners and build clearer ways for employers to be involved in shaping those pathways to enable a more effective lifelong service. This will be key both to younger people at school who are making course choices that will affect their future careers, as well as people in mid-career who are looking to re-skill to take advantage of new growth opportunities.

We will also work with the sectors identified in this strategy to develop clear messaging about the forthcoming opportunities which can be easily disseminated through relevant channels. The forthcoming three-year plan for Employability will set out our priorities for devolved services and introduce a greater focus on how employability services can support the just transition to net zero. The transition to net zero will be devised and managed to ensure that challenges and benefits are fairly distributed, and our commitment to Community Learning and Development will ensure that new opportunities for learning and employment at a grass roots level help to lift adults and young people out of poverty

3. Enhance the transferability of skills. Through the Just Transition Fund we will continue to support skills interventions that support the transferability of workforce across sectors to meet the needs of the net zero transition. Funding so far includes; supporting the industry-led development of an Offshore Energy Skills Passport, to support worker mobility between sectors, and specific regional programmes of upskilling and reskilling such as the Energy Skills Transition Hub and the National Energy Skills Accelerator in the North East.

4. Encourage and support employers in our opportunity areas to invest in training. As part of our programme of reform across education and skills, the Scottish Government will further develop the apprenticeship model, making important enhancements to Foundation, Modern, and Graduate apprenticeships, all of which will continue to support our net zero ambitions. Collaboration between the education and skills system and employers is critical to effective skills planning and development. We will therefore build upon the excellent examples where colleges and universities have aligned provision and/or attracted commercial investment for skills development and commit to working with the SFC and the sector to further embed that approach, including through e.g. the College Tripartite Alignment Group.

5. We will expand Scotland’s Migration Service^[52] to provide more support for users, including employers and investors in our green industries. The service will provide information and advice to help employers and investors navigate the UK’s immigration system to help meet their skills needs.

Learning for Sustainability (LfS)

This is the Scottish approach to sustainable education and climate change education. It is a crosscurricular entitlement for all learners aged 3 to 18 years which aims to raise learners’ awareness of green jobs resulting from the transition to net zero.

The LfS Action Plan aims to support our learners to understand the impacts of climate change and the importance of adaptation, and for those transitioning from education into college, university or employment to choose career paths that support a sustainable future, including green jobs.

The recently announced Curriculum Improvement Cycle provides an opportunity to strengthen and improve careers education through engagement with employers, and improvement of crosscurricular themes, ensuring clear lines of career progression and learning pathways across the 3-18 curriculum.

Building Scottish Supply Chains For Green Growth

Manufacturing is worth around £16.4bn in GVA^[53] to the Scottish economy, employing around 173,000 people^[54]. Manufacturing contributes to around half of our international exports and half of business investment in research and development.

Scotland’s manufacturing sector is distinguished by the concentration of small and medium enterprises (SMEs), which are often highly adaptable and highly skilled with a broad customer base that reaches beyond a single vertical sector. This makes them ideally placed to diversify into energy transition markets, providing the kind of agile, resilient and local supply chain that is critical to the success of large-scale investments.

To ensure that our manufacturing sector enables the success of inward investments and develops its own export capabilities in emergent sectors, we have developed an integrated energy supply chain package of support, targeted at the opportunities set out in this GIS as well as in clean heat. In tandem with our enterprise agencies, we will:

1. Support inward investors to understand the size, shape and strength of the local supply chain. We will work through Scottish Development International and focus on attracting significant inward investors and Tier 1 suppliers. This will include holding ‘meet the supplier’ events to showcase the breadth of supply chain capability in Scotland and provide mapping information about the local supply chain to inform investment decisions to encourage companies to procure a high proportion of goods and services from Scottish SMEs. We will also showcase the strength of the Scottish supply chain and further opportunities for investment in Scotland’s energy transition at key international events, such as COP 28.

2. Strengthen the breadth and resilience of the local supply chain. Our enterprise agencies will provide detailed analysis of specific energy supply chain opportunities. This will include information on when and where goods and services will be procured, including timings of projects, components/services required and volumes. They will also raise awareness of opportunities through communications and “Meet the Buyer” events. Highlands and Islands Enterprise have specific responsibilities in respect of community empowerment and will work with local communities to engage them in how best to maximise and realise local economic benefits. To further strengthen the supply chain, and enhance Scotland’s competitiveness in global renewable markets, we will work with Scottish Development International to deliver ‘A Framework to Grow Scotland’s Renewables Exports’ and support businesses to take advantage of the growing renewable energy opportunities around the world. This activity will inform our strategic approach to offshore wind supply chain investment, where the Scottish National Investment Bank and enterprise agencies, in collaboration with Crown Estate Scotland, will support priority supply chain and infrastructure investment opportunities in Scotland.

3. Support investment and innovation in our supply chain to drive productivity. We will forge innovation partnerships between academics and supply chain industries, developing a Scotland-wide approach to utilise our innovation assets, such as the National Manufacturing Institute for Scotland (NMIS), and our work on Green Freeports and Investment Zones. We will support manufacturing companies in our supply chains through a long term commitment to our ‘Making Scotland’s Future’ programme, unlocking and enabling innovation and investment. At the same time, we will continue to invest public money, including through the Just Transition Fund, where it can leverage private investment to grow integrated energy supply chains and promote opportunities for business to access seed funding, growth capital and patient finance, including through our enterprise agencies, the Scottish National Investment Bank (SNIB) and relevant UK Government schemes.

4. Deliver a supplier excellence programme for companies across the energy supply chain. In Autumn 2024, Scottish Enterprise will launch a three-year programme, in partnership with Skills Development Scotland (SDS), to support SMEs to realise the opportunities in offshore wind and hydrogen, broadening out to wider energy transition opportunities thereafter. Our Enterprise and Skills agencies will also support the reskilling and upskilling of the workforce, building from Scottish Enterprise’s Leadership and Workplace Innovation Service.

5. Build supply chain resilience through recycling and remanufacturing of components and materials. Working closely with partners such as Zero Waste Scotland, enterprise agencies and SEPA, we will develop interventions to support a circular approach to the energy transition, that sustainably and responsibly secures the critical materials needed. We will address the opportunities and barriers to adopting circular solutions by businesses so they make commercial sense. This will include pioneering approaches to recycling/ remanufacturing of wind economy facilities at the end of their life; ensuring waste management regulations permit circularity in energy; and developing an effective targeting regime which drives behavioural change at the individual asset level. We will also develop a model for industry and policy engagement, drawing on the approach of the Coalition for Wind Industry Circularity; and collaborate with UK Government on their work on critical imports and supply chain resilience.

Hydrasun

For five decades, Hydrasun has delivered integrated fluid transfer, power, and control solutions to the global energy market, providing expertise in the design, installation, and inspection services of high pressure gas systems in safety critical environments, to the global energy industry.

In 2016, Hydrasun entered the hydrogen market as a systems integrator and services provider offering installation and commissioning services for flagship demonstration Hydrogen Refuelling Stations (HRS) and industrial fuel switching projects both in the UK and Europe. Hydrasun have since invested in network of technical centres, that support the entire project lifecycle in Aberdeen, Aviemore, Glasgow and Teesside in the UK and in Netherlands and Germany. They have built a critical mass of in-house expertise that is helping to drive industrial and transport decarbonisation.

Hydrasun has successfully secured the hydrogen technology package for the Aberdeen Hydrogen Hub Project in the City of Aberdeen, Scotland. This will see Hydrasun design and build a scalable green hydrogen refuelling station facility with hydrogen production, storage, dispensing and distribution capabilities. They are also developing a mid-scale packaged hydrogen refueller, which has the potential to support the growth and expansion of hydrogen vehicle fleets, towards wider national infrastructure roll out. This development is bolstered by their acquisition of Fuel Cell Systems in September 2022, which has enhanced their capacity to deliver interim packaged hydrogen refuelling solutions to projects in the UK, Europe with plans for further expansion into the U.S. markets.

The company is involved in the UK Hydrogen Production Business Model Funding and Hydrogen Allocation Rounds (HAR), providing enabling infrastructure for industrial use cases, such as the whisky distillery sector.

To leverage the abundant transferable skills available in Scotland, Hydrasun opened their hydrogen skills academy in 2022, in recognition of the need to deliver skills pathways for the workforce that will be required to deliver critical infrastructure projects.

The company exemplifies the broad opportunities available in Scotland, not only for exporting hydrogen as a commodity but also for supplying goods and services within the hydrogen supply chain.

Planning And Consenting

Robust, timely and proportionate planning and consenting systems across our land and sea are a key enabler of Scotland’s net zero transition. These systems provide clarity and confidence to support development and investment markets, whilst balancing the needs of communities, nature and other users of the land and sea. We are committed to continuing to work in partnership with those affected by the net zero transition through our planning and consenting processes to build our understanding of the impacts and opportunities to ensure a just transition to net zero.

We are committed to the continuous improvement of our planning and consenting systems. We will continue to invest in the evidence base that provides a baseline for informed decision making that is objective, transparent and accountable and work with delivery partners to streamline processes, maximise the development pipeline, support investor confidence and where appropriate, allow local authorities to focus on more complex and/or strategic cases.

Across Scotland’s planning and consenting functions we are:

• Improving the quality, consistency and pace of the planning and consenting process through recruitment and via our recent ‘Investing in planning – resourcing Scotland’s planning system: consultation’^[55].
• Supporting training and upskilling across our public sector resources and ensuring a pipeline of future planning and consenting professionals.
• Making technical improvements to standardise processes and working with statutory consultees to improve efficiencies across the system.
• Investing in our evidence base to reduce uncertainty and improve decision making.

The planning and consenting environment is a complex mix of reserved and devolved responsibilities with UKG holding many of the levers for effective change. We are committed to working collaboratively with UK Government and, as it develops, GB Energy, and will work at pace to maintain an environment that helps realise the potential benefits of our opportunity areas. We will establish Scotland’s first Planning Hub to build capacity, resilience and improve consistency in decisions. Focusing on hydrogen in the first instance, we will work with partners to expand the role of the Hub and extend its services in the longer term. We will also develop initiatives to support recruitment including a planning apprenticeship scheme.

Offshore Wind

Our aim is to reach timely and robust determinations on more straightforward offshore wind projects within 9 to 12 months, although complex cases may take longer. To deliver efficiencies we will:

1. Increase support for early consultation and engagement with stakeholders at the pre- application stage, to improve the quality of applications and reduce overall consenting time.

2. Be delivery focused and data driven to improve workflow, including consideration of key decision points such as Contracts for Difference rounds.

3. Improve the marine planning framework by publishing an updated offshore wind policy statement in 2025/26 and adopting a new Sectoral Marine Plan for Offshore Wind Energy in 2025 to deliver the spatial planning framework for the ScotWind and INTOG leasing rounds.

4. Commission up to £3.2m of research through the ScotMER programme to reduce uncertainty and mitigate cumulative impacts in the planning and consenting process.

5. Implement the offshore wind provisions within the Energy Act 2023 and underpin nature positive offshore wind development. Under the Joint Environment Accelerator Programme (JEAP), we are taking forward a package of work to develop fresh approaches to strategic compensation policy and process, establish a Marine Recovery Fund for the securing and delivery of compensatory measures and reform secondary legislation to provide a more effective regime for delivering compensatory measures.

Onshore wind:

Our aim is to accelerate onshore wind Section 36 determinations in line with the commitment in the Onshore Wind Sector Deal to halve average determination timescales from 2025, to 12 months without a public inquiry (PI) and 24 months with a PI. We will:

1. Deliver on the wider commitments to reduce Section 36 application determination timelines by streamlining approaches to scoping Environmental Impact Assessment Reports; standardising templates and associated guidance; and increasing skills and resources.

2. Respond to the ‘Investing in Planning Consultation (closed on 31 May 2024) which considered amendments to the current 50 MW threshold at which the Scottish Ministers determine applications and proposals to enhance local planning resources, including: the introduction of a Planning Hub; strengthening the future pipeline of planners; improving planning practices and encouraging proportionality.

Onshore Electricity Networks:

Our aim is to accelerate determination timescales for electricity transmission developments, to within 12 months, including encouraging excellent pre-application community engagement and application quality. This acceleration will support investor confidence around connection dates for major renewables projects. We will:

1. Implement the recommendations of the Transmissions Network Short Life Working Group aimed at determining applications for National Developments within 12 months. Key measures include standardised documentation, and stricter enforcement of timescales for statutory consultee responses.

2. Carry out a review of Scottish Consenting. Continuing to work with UK Government on the review under the UK Electricity Act 1989.

3. Develop pre-application community engagement guidance for transmission developments to improve public engagement, confidence in the consenting process and overall quality of applications.

Hydrogen and Carbon Capture and Storage:

Our aim is to build awareness and increase knowledge across our planning, consenting and licensing authorities to enhance skills and decision-making capability on hydrogen and CCUS developments. We will:

1. Launch a Continuous Professional Development (CPD) course entitled ‘An Introduction to Hydrogen for the Public Sector’ is now available. The course modules will also be offered to local planning officials and other public sector agencies and is free of charge to all participants.

2. Publish comprehensive guidance for onshore and offshore hydrogen, serving as a ‘one-stop portal’ for hydrogen project developers.

3. Streamline the planning and consenting components critical to the deployment of CCUS. We will review the latest research on industrial decarbonisation and work with NECCUS, an alliance of industry, government and other experts, to bring together emitter projects, statutory consultees and planners to develop and implement a co-ordinated programme of actions to streamline approaches taken to the industry in Scotland.

Housing And Enabling Infrastructure

Delivering the major green infrastructure projects which will underpin the growth of Scotland’s green economy, will require a range of enabling infrastructure to support it. This includes the availability of the right homes in the right places to support the required workforce. A lack of accommodation or housing options in easy reach of new and adapting centres of green growth could act as a brake on growth and it is important that housing and the infrastructure required to support it are planned jointly and effectively. New housing developments, especially those in rural areas, will increase demand for a range of public services and infrastructure, including health and social care, education and transport links. This requires a partnership of national and local Government, enterprise agencies and the private sector to assess and meet demand and leverage the economic opportunities it provides for Scottish supply chains.

The Rural and Island Housing Action Plan, published in October 2023, sets out a range of actions we are taking alongside local authorities as the statutory housing authority, housing providers, the private sector and communities to support housing delivery in rural and island areas.

We have already made progress in many areas:

• Between April 2016 and March 2023, the Scottish Government has supported the delivery of 10,094 affordable homes in rural and island areas, representing 16% of affordable homes delivered over this period.
• Support has been provided for community- led housing alongside funding for the acquisition of key worker homes and work with private sector, housing and enterprise agencies, to improve understanding of housing requirements arising from key sectors.
• Close and productive working has been established with South of Scotland Enterprise, Highlands and Islands Enterprise and the housing sub-groups of Regional Economic Partnerships in the areas they support. This has included a focus on private sector investment, construction capacity and effective supply chains with the South of Scotland having recently launched its Housing Action Plan^[56] linked to its economic ambitions for the area.
• The progress of the Housing Investment Taskforce which, by March 2025, will identify actions that will unlock both existing and new commitments to investment in housing by bringing together key interests of investors and investees.

Working in partnership we will:

1. Deliver our ambition for 110,000 affordable homes by 2032, 10% of which will be in rural and island communities.

2. Deliver the demand-led Rural Affordable Homes for Key Workers Fund, working with local authorities and registered social landlords and supported by up to £25m to 2028.

3. Support community-led affordable housing development, through the continuation of the demand-led Rural and Islands Housing Fund with up to £30m this Parliament. We will commission independent research to support a review of affordable home ownership in rural and island areas and extend the use of rural housing burdens in the delivery of affordable housing.

4. Explore the potential and impact of modern methods of construction in rural and island contexts. This will include work with BE- ST, our innovation centre that supports and provides practical assistance with solutions that advance delivery of a zero carbon built environment.

5. Reform and modernise compulsory purchase legislation in Scotland and consider the case for Compulsory Sales Orders.

6. Support collaborative and place-based approaches to identify land for affordable housing working closely with Regional Economic Partnerships and our communities. This will include a focus on public sector assets, and land reform rooted in community empowerment.

7. Ensure future innovation, powered by regular partner and community engagement, and an annual summit chaired by the Minister for Housing to assess progress, impact and the changing dynamic across Scotland’s rural and island communities. Work with Prosper, SSEN, SLE and other key business interests will enable the development of a better understanding of future investment and labour requirements which can be shared with local government and considered alongside existing housing land provision and programmed supply as well as any requirement for additional capacity. Mechanisms such as Masterplan Consent Areas could also play a useful role here in supporting delivery.