As Scottish ports vie to secure status as a “green freeport”, the boss of Aberdeen harbour has warned the north east region could fail to “realise its full potential” if its bid is not chosen.
Bob Sanguinetti, the chief executive of Aberdeen Harbour Board (AHB), said the port and its partners were awaiting full details of the concept due in a bidding prospectus in coming weeks before committing to apply.
However, he said “we are focused on getting it if we apply for it,” adding: “If we don’t get it, Aberdeen and north-east of Scotland will not realise its full potential on the road to energy transition and net zero.”
What is a green freeport?
Two bids for Scottish freeports will be named this summer after a £52 million deal was struck between the Holyrood and Westminster governments earlier this week.
The announcement came after months of wrangling between the SNP and the Conservatives over whether 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.
Critics warned the government delay for similar schemes north of the border meant Scottish ports risked losing out to southern rivals.
However, freeports are not universally popular – the Scottish Greens have criticised the plans and the SNP who they govern with, claiming the schemes are often associated with low wages, crime and unfair work practices.
Scotland’s finance secretary Kate Forbes defended the deal and insisted the SNP has worked to ensure firms investing will have to meet net zero environmental targets.
Mr Sanguinetti said: “Whether it is tax incentives, customs arrangements or easing back on planning permission and so on – it creates an environment where new businesses can flourish more quickly.
“In so doing you attract inward investment, you create highly skilled jobs and you generate further prosperity for the region.”
How many green freeports will there be?
There are three or four strong potential bids among a number of potential runners and riders for the new status in Scotland, but only two will be chosen.
Mr Sanguinetti said Aberdeen Harbour offered unique knowledge and experience that other ports couldn’t match.
“We have the expertise in Aberdeen Harbour that I would argue no one else in the UK has when it comes supporting the offshore sector.
“All those skills are transferable from oil and gas to to renewables.
“All the expertise that resides in the hinterland and the extensive supply chain network that Aberdeen and Aberdeenshire has does not exist anywhere else.”
He added: “Conferring green freeport status, should we apply for it, will consolidate that transition and reinforce Aberdeen’s key role as Europe’s principle energy hub.”
He said the harbour was working closely with ETZ ltd which is leading a controversial plan to establish a 30-40 ha industrial park, known as the Energy Transition Zone, alongside the new £350m South Harbour expansion.
The group, chaired by billionaire Sir Ian Wood, aims to support the region’s shift away from reliance on oil and gas to make the area a hub for renewables and Aberdeen “the net zero energy capital of Europe”.
However, community campaigners have highlighted the adverse effects losing public space such as St Fittick’s Park directly across from the South Harbour area would have on the health and wellbeing of local residents.
Mr Sanguinetti said the harbour “could always do with more space”, but pointed to the scale of the harbour board’s new development at Nigg Bay and the surrounding industrial estates as areas for the expansion of port activity, including handling cargo.
“Actually the arrival of South Harbour gives us 125,000 sq m (410,000 sq ft) of lay down area,” he said.
“In partnership with the Energy Transition Zone there is access to more space there for high end manufacturing and assembly.
“And we mustn’t forget not much further from Aberdeen Harbour North and South we have Altens – so there is more space there that can be developed.”
Green freeports – who is applying?
Any rejection of a north east bid for green freeport status could bring back bad memories of when the region’s bid for part of a £1 billion carbon capture and storage competition was snubbed by the UK government in favour of projects in the north of England.
AHB’s plan for a freeport also includes Aberdeen City and Aberdeenshire councils, Aberdeen International Airport and the Port of Peterhead.
Previously the partners have said a joint bid could create up to 22,000 jobs as a result of “tax breaks, customs benefits and the creation of innovation hubs”.
However, on a visit to Fife this week Prime Minister Boris Johnson hinted strongly in favour of a rival bid led by Forth Ports and aerospace giant Babcock.
The partners have proposed to create a Firth of Forth green freeport taking in Port of Leith, Grangemouth – home to Scotland’s freight hub and principal petrochemical cluster – and the Rosyth ship yards, which the partners claim could create 50,000 jobs.
Fort Ports, which already operates a freeport at Tilbury in London, has confirmed it will go ahead with a bid for the Scottish version.
Meanwhile, a consortium led by Port of Cromarty Firth (PoCF), Roy MacGregor’s Global Energy Group and Port of Inverness are also keen to take part.
Port of Cromarty Firth chief executive Bob Buskie said green freeport status was a “key aspiration” for the group, which has formed an organisation called Opportunity Cromarty Firth (OCF) to focus on offshore renewables and green hydrogen production.
Mr Buskie said: “The Cromarty Firth is ideally placed to become a green freeport and we look forward to working with the Scottish and UK governments as this process moves forward.
“The Firth is uniquely positioned at the heart of a host of multi-billion pound renewable projects, including offshore wind and green hydrogen potentially worth billions of pounds.
“These in turn would create quality jobs and business opportunities across the Highlands and the whole of Scotland on a level not seen since the oil boom of the 1970s.”
Up to nine port groups submitted “notes of interest” to the Scottish Government last year when it called for greenport bids, including a proposal for Glasgow City Region bid including Clydeport owner Peel Ports, the UK’s second largest port operator.
Port authorities in Montrose, Orkney and Shetland also indicated interest last year alongside Cairnryan, which is owned by Dumfries and Galloway to Belfast ferry operator, P&O.
Port of Dundee, also operated by Fort Ports, along with Dundee City Council is also a potential contender .
