With up to nine bids thought to be in the running for Scotland’s two green freeports, nerves are starting to jangle as a decision on the two winners is fast approaching, possibly as early as this July.
What is a green freeport?
A green freeport is a large zoned area within a defined boundary which includes rail, sea or air links. Operators and businesses in the zone can benefit from a package of tax and other incentives.
The green freeport model in Scotland closely aligns to the offer set out in England, with both having four main objectives:
- Promote regeneration and high-quality job creation.
- Promote decarbonisation and a “just” transition to a net-zero economy.
- Establish hubs for global trade and investment.
- Foster an innovative environment.
Who are Scotland’s runners and riders?
Up to nine port groups submitted “notes of interest” to the Scottish government last year and are currently jockeying to win the two green freeports up for grabs, with a much-mooted bonanza for jobs and investment touted as the prize.
Top three contenders:
Opportunity Cromarty Firth (OCF)
The Opportunity Cromarty Firth consortium says it is primarily focused on “opportunities arising from offshore renewables” and green hydrogen production.
Steering group partners include: Highland Council, Global Energy Group, Port of Inverness, Johnston Carmichael, Port of Cromarty Firth and Aventus Energy among others.
The bid encompasses ports, industrial facilities and logistics centres along the north and south shores of the Firth of Forth and at Edinburgh Airport to create a green investment zone.
The Port of Grangemouth, Scotland’s largest port and principal export hub as well as its major petrochemical cluster; the Port of Leith, where Forth Ports has started work on the country’s largest offshore renewable energy hub alongside BP and EnBW.
The bid also includes Port of Rosyth, the nation’s agri bulks hub and also the base for the Babcock’s large quayside maufacturing facilities, with capacity to expand and create new trade routes to continental Europe.
Aberdeen and Peterhead Ports
The ports are due to make a joint bid for the special status which they maintain will increase economic activity, job creation, innovation, inward trade and investment.
The collaboration features the Port of Aberdeen and Peterhead Port Authority, alongside Aberdeen International Airport, Aberdeen City Council and Aberdeenshire Council.
There are also industry representatives including Opportunity North East.
Other possible bidders
A proposal for Glasgow City Region bid including Clydeport owner Peel Ports, the UK’s second largest port operator was also included in the notes last year.
Port authorities in Montrose, Orkney and Shetland equally indicated interest in 2021 alongside Cairnryan, which is owned by Dumfries and Galloway to Belfast ferry operator P&O.
New employment forms a key plank of the green freeport bids, with some making ambitious claims as to future staffing needs.
“Now is the time for us to be bold, creating a green growth corridor the length of the Firth of Forth that will kickstart the re-industrialisation of Scotland’s central belt,” said Forth Ports Group chief executive Charles Hammond.
“Our Firth of Forth green freeport will provide the essential platform for Scotland’s decarbonisation through the creation of a green growth investment corridor creating 50,000 new, high-quality jobs in renewable energy, manufacturing, sustainable fuels and construction.”
‘Trickle-down’ effects from the need for hotels, restaurants and shops could also be felt as clusters of small businesses are drawn to new opportunities created by freeports.
‘Long-term sustainable well-paid jobs’
“Freeports – because of legitimate tax advantage – allow for inward investments to make a more compelling business case,” added GEG operations director Steve Chisholm whose company is a major part of OCF.
“There is almost £1bn of spend per gigawatt. That is going to create more jobs. It is our families, our children, grandchildren we are looking to provide for.
“What we want to create are long-term sustainable, well-paid jobs.”
Mr Chisholm noted there could be “multiple factories” attracted into the area while hydrogen developments were also likely to bring “potentially thousands of new jobs.”
Successful bids could be unveiled this summer
The two winning bids for Scottish freeports will be named this summer after a £52 million deal was struck between the Holyrood and Westminster governments earlier this year.
The announcement came after months of wrangling between the SNP and the Conservatives over whether or not the projects should be called “freeports” or “greenports” – with the warring administrations having agreed to compromise on “green freeports.”
Eight freeports in England were given the green light at the March 2021 Budget, with the aim of creating zones offering tax incentives and other drivers to boost economic activity and job creation.
Vital to ensure regional economies also benefit
“The twin objectives of creating high-quality jobs and contributing to decarbonisation of our national economy sit right at the heart of our ambitions for, and expectations of, green freeports,” added Finance Secretary Kate Forbes.
“While two locations will be designated as green freeports it will be vital to ensure regional economies and wider national supply chains will also benefit.”
The UK and Scottish governments will be providing a range of tax reliefs and financial support through devolved and reserved mechanisms, while the joint prospectus includes payment of the real living wage.
The concept has not met with complete enthusiasm however and was slammed earlier this year as “greenwashing” by the Scottish Green Party.
Finance spokesman Ross Greer criticised the £52m agreement as a “corporate giveaway” despite his party being in government with the SNP.
The Greens criticised the freeport plans, claiming the schemes are often associated with low wages and crime.
Ms Forbes has nonetheless vigorously defended the deal and insisted the SNP has worked to ensure firms investing will have to meet net zero environmental targets.