Month: June 2023

Glasgow City Region and North East of Scotland will be Scotland’s Investment Zones following an agreement between the UK Government and Scottish Government.

The pace at which the agreement was developed is testament to the strength of partnership between the two governments and what can be achieved when there is a focus on delivering economic growth and opportunity for people in Scotland.

Investment Zones are a crucial part of levelling up, and are designed to deliver economic growth, more high skill jobs, investment, and future opportunities for local people – a key priority for Prime Minister Rishi Sunak.

The tax incentives and funding that are being made available by the UK and Scottish governments will attract investment, improve skills, provide specialist business support and improve local infrastructure.

Investment Zones are focused around research institutions such as universities. They focus on driving growth in priority sectors including technology, the creative industries, life sciences, advanced manufacturing and the green sector. They will underpin clusters to boost UK competitiveness in these high-potential industries, leveraging existing strengths and assets to increase opportunities for local communities and driving productivity growth.

The two Scottish regions are the first Investment Zones outside of England and Levelling Up Secretary Michael Gove will today welcome this ‘historic milestone’ in widening the programme to other parts of the UK.

Secretary of State for Levelling Up, Michael Gove said:

This is an historic milestone as we widen the opportunity and ambition of the Investment Zone programme to grow the economy across the whole of the United Kingdom.

I am very appreciative of the constructive approach the First Minister and Deputy First Minister have shown in the meetings I have had with them in recent weeks. We all have a shared ambition to work together to see all parts of Scotland thrive and today’s agreement builds on our successful rollout of Green Freeports in Scotland earlier this year.

Both Aberdeen and Glasgow, and their surrounding areas, have been at the very heart of the UK’s economic success for generations. Shipbuilding on the Clyde. Oil and gas exploration in the North Sea and a leader in the renewable sector. Both responsible for exporting some of the world’s finest food and drink around the globe. Both playing home to some of the biggest financial service companies we have. We want to build on this proud present and past so that Aberdeen and Glasgow continue to make a massive contribution to the UK economy.

The two Scottish Regional Economic Partnerships areas, made up of a number of different local authorities, will each benefit from an overall funding envelope of £80 million over a five-year period, while making the most of both reserved and devolved policies as is the case with Green Freeports.

The locations of Glasgow City Region and North East of Scotland have been selected jointly by the UK Government and Scottish Government based on their research strengths, an assessment of economic need and potential, and a consideration of geographic spread.

Regional leaders, businesses and universities will take the lead in shaping regional plans, to ensure Investment Zones draw on the entrepreneurial spirit and wealth of research talent that exists across Scotland.  Discussions will now begin with both regions to develop detailed proposals.

Secretary of State for Scotland, Alister Jack, said:

“This is exciting news for Glasgow and Aberdeen – the establishment of two Investment Zones in these areas will enhance their existing strengths, helping to attract investment, grow our economy and create jobs in priority sectors. This will build upon the great progress already being seen with the Freeports we announced earlier this year in Inverness and Cromarty Firth and the Firth of Forth.

“We have worked closely with the Scottish Government throughout, which shows again what can be achieved when Scotland’s two governments work together to promote a fair spread of opportunities across Scotland. The UK Government is focussed on levelling-up throughout the UK which includes investing more than £2.2 billion in projects in Scotland.”

The delivery of investment zones will build on the success of the joint UK and Scottish government agreement for two Green Freeports in Inverness and Cromarty Firth and Firth of Forth, to create jobs, drive growth and level up the country.

Backed by up to £52 million in UK Government funding, the freeports are expected to bring forward an estimated £10.8 billion of private and public investment and create over 75,000 new, high-skilled jobs.

From hydrogen-powered cornflake production to low carbon Scottish whisky distillation, businesses across the UK have today (28 June 2023) received a share of over £80 million government funding to ditch costly fossil fuels for cleaner alternatives. 

Breakfast giant Kellogg’s is among 29 successful projects to change their production processes to cut their emissions. The company plans to use hydrogen to fuel their cereal making process in Manchester, backed by over £3 million government investment.  

Meanwhile one of Scotland’s oldest whisky makers, Annadale Distillery, will also take a step towards a new low carbon future, with a £3.6 million government investment in new thermal heating technology. This will see the distillery work with Exergy3 Ltd to develop a system that stores energy from electricity in special ceramic bricks, to then produce heating gas that could fully decarbonise the whisky-making process.

Today’s funding, announced by Minister for Energy Security and Net Zero Graham Stuart, puts businesses on a path to revolutionising their industry with cleaner energy sources – such as hydrogen and biomass. It marks the government’s latest move to boost the UK’s energy security and grow the economy. 

Minister for Energy Security and Net Zero Graham Stuart said:

Whether it’s the first meal of the day or a night cap, the great manufacturers of our country are striving to cut their carbon emissions and their energy bills – and in turn, support our efforts to boost our energy security.

Our investment of over £80 million will help them to go further and faster, using the latest science, technologies, and new energy sources to cut ties with fossil fuels and future-proof their industries.

The Minister will announce the winners at today’s Climate Innovation Forum, where he’ll call on industry leaders and international bodies to get behind the green innovation drive, as part of London Climate Action Week’s flagship event.

Lord Callanan, Minister for Energy Efficiency and Green Finance, said: 

Britain has a long and proud history of pushing the boundaries in science – and our backing with over £80 million for these cutting-edge projects today will help make way for the next era of innovation.

The transition away from fossil fuels presents a huge opportunity for our growing green energy sector and we will continue to make sure UK business can benefits from its full potential.

Another leading name getting a slice of the funding is Britain’s biggest biscuit maker, Burton’s Food Ltd – home to Maryland cookies and Jammie Dodgers – which will see them innovate to swap out a gas oven for low carbon electric, at their Dorset bakery, thanks to over £3.3 million from the government.

Around £950,000 will also go to consumer goods giant Procter & Gamble (P&G) to explore how to integrate CCUS into their manufacturing, by extracting carbon from the company’s waste streams to help cut emissions. The project will form of a new research drive, CarboNation, in partnership with Newcastle University’s School of Engineering and Centre for Process Innovation.

The energy projects receiving backing today come in the latest round of the government’s £1 billion Net Zero Innovation Portfolio, which aims to scale up low-carbon technologies for use across UK industries. 

The £82.9 million announced today comprises:

• Industrial Fuel Switching competition: 13 businesses, from a paper factory to glass manufacturers, will receive a total of £52.5 million to support projects developing low-carbon alternatives to fossil fuels, such as hydrogen or biofuels
• Hydrogen BECCS Innovation Programme Phase 2: 5 project winners have been awarded a total of £21.2 million to turn biomass and waste, such as sewage, into hydrogen with carbon capture
• CCUS Innovation 2.0 competition: 11 winning projects, including recycling CO2 for fertiliser production, will be given a total of £9.2 million to develop the latest technology in carbon capture usage and storage

The funding forms part of the government’s commitment to reduce overall UK energy demand by 15% by 2030, alongside the wider ambition for the UK to move towards greater energy independence. 

Dr Markus Rondé, chief executive officer of Exergy3, said:

The decarbonisation of industry is a fundamental part of the UK’s race to net zero. However, so far, the extremely high operating temperatures of many industrial processes have made it technically and financially challenging.

The NZIP funding enables us to build a full-scale demonstrator at the Annandale Distillery in Scotland. For Exergy3’s technological and commercial development this will be a great leap forward and we are all very excited to try Annandale’s first batch of low-to-no carbon whisky.

Scott Frame, Vice President, R&D and Site Leader, Newcastle Innovation Centre, said:

CarboNation is a great example of where innovation can be applied to carbon capture and use technologies to solve specific challenges that are not only relevant to P&G, but both the wider Fast Moving Consumer Goods industry and society at large.

We’re really excited to have received this grant, alongside other valued partners, in order to accelerate P&G’s understanding within this area, supporting our collective pursuit of wider sustainability goals.

Alongside the funding allocated today, the government has also published new reports to support the transition to alternative energy sources for UK industry. This includes guidance on designs for hydrogen technology systems, as part of the Industrial Hydrogen Accelerator programme.

Notes to editors