Written evidence submitted by Storegga – ITS0028

Dear Sir/Madam,

I appreciate we are slightly late to respond to the call for evidence on the Industrial Transition in Scotland, but in the event it can still be included, our input is below:

1. Lessons from Past Industrial Transitions

-          Comparisons to historical industrial shifts – The decline of coal, steel, and heavy engineering offers lessons on workforce reskilling, economic diversification, and infrastructure repurposing—key considerations for the transition from oil & gas to CCS and hydrogen. 

-          Socio-economic impacts – Former industrial regions (e.g., Ayrshire, Fife, Aberdeenshire) still experience economic stagnation and job losses from past transitions, underscoring the need for proactive, entrepreneurial, and ambitious support in emerging sectors. 

-          Effectiveness of government intervention – Previous UK policies (e.g., coal mine closures) often lacked long-term economic planning, reinforcing the need for a strategic, well-funded transition framework for CCS and hydrogen.  Offshore wind? Gov’t intervention in the early stages of sector development & now via CfDs has helped create an industry of scale & wrt floating technology – world leading.

2. Current and Future Industrial Transitions

-          Oil & Gas transition – The North Sea sector is undergoing structural change, with CCS and hydrogen positioned as natural extensions of existing industry expertise and infrastructure without which there will be a critical loss of expertise and result in Scotland being unable to capture the natural advantages it has. 

-          Regional impact – Key oil & gas hubs (Aberdeen, Grangemouth, St Fergus) could face significant disruption or transformation depending on investment in CCS and hydrogen. 

-          Lessons from past and international approaches: 

• Norway – Strategic, holistic, government-led investment in CCS and hydrogen (e.g., Longship project). 
• Germany – Managed coal phase-out with extensive workforce retraining and regional economic development. 
• Application to Scotland – A just transition must ensure job creation in CCS/hydrogen aligns with the decline in oil & gas, supported by clear and stable policy frameworks for investment, infrastructure repurposing, and supply chain adaptation as well as streamlined planning and permitting. 

3. UK Government’s Industrial Strategy and Scotland’s Needs

-          Barriers to growth:

• Policy and regulatory uncertainty (e.g., UK Emissions Trading Scheme, CCS business models, alignment with European ETS). 
• Grid and infrastructure limitations. 
• Funding to support gaps in early-stage CCS/hydrogen deployment not least given the delay in policy certainty and competing regions for deployment of capital (note the recently published Malaysian CCUS policy). 
• Procurement exercise nature of HMG intervention in contrast to what is the case in Europe & RoW where it is much more market-led

-          Enablers of industrial growth:

• Clear business models and government-backed incentives. 
• Alignment between UK and Scottish governments on funding, policy, and permitting. 
• Investment in storage sites (e.g., Acorn CCS) and hydrogen production hubs. 

-          Place-based approach:

• Tailored support for regional industrial clusters (e.g., NE Scotland, Central Belt). 
• Recognition of Scotland’s distinct energy transition needs within UK-wide policy. 
• Coherence with Scotland’s Green Industrial Strategy and National Strategy for Economic Transformation. 

Please reach out with any questions.

Shannon

May 2025