Update 13/01/2023

Successful green freeports chosen- Cromarty Firth and Forth

Following on from our below blog, the long-awaited decision on the two successful Scottish Green Freeports has now been announced by the UK and Scottish governments, who had a joint approach to the assessment and selection process. The Green Freeports - special economic zoned areas with potential for significant regeneration, trade, and investment - will benefit from tax incentives and rebates for green investment.

Five bids were received – North East Scotland Green Freeport (NESGF), Opportunity Cromarty Firth, Orkney Green Freeport, Forth Green Freeport (FGF), and Clyde Green Freeport – with bidders setting out how they would regenerate their areas and support the transition to net zero.

The successful bidders have now been announced as Opportunity Cromarty Firth and Forth Green Freeport.

The UK Government is investing up to £52 million to create two Green Freeports in Scotland. Operators and businesses in the Cromarty Firth and Forth Ports can now benefit from a package of tax and other incentives and, in exchange, will be required to contribute to four key policy objectives:

• promoting regeneration and high-quality job creation
• promoting decarbonisation and a just transition to a net-zero economy
• establishing hubs for global trade and investment
• fostering an innovative environment.

The opportunities of Green Freeport status are considerable and it will be interesting to see how the chosen bidders’ proposals for regeneration and innovation translate into tangible action in the coming months.

We have worked closely with the Port of Cromarty Firth over the last decade to assist them already deliver significant port infrastructure developments which have placed the Port in an extremely strong position to meet the needs of the offshore wind sector in particular.  We are delighted to continue to assist the Port in its ambitious plans for future development which can now include making the most of the opportunities presented by Green Freeport status.

25/03/2021

Reducing the impact of the maritime sector’s emissions to air will be critical in the path to Net Zero.

The UK’s maritime sector is substantial with over £500 billion of trade passing through UK ports each year. The success of today’s global economy means that we rely on ships, and therefore ports, more than ever.

The UK Government has committed itself, by law, to achieve Net Zero emissions of all greenhouse gases by 2050 - and Scotland has gone further with an ambitious Net Zero target of 2045.

Why should ports become more sustainable?

While ports are not the major contributor to the industry’s climate impact, they nonetheless often have a significant effect on local communities due to their contribution to air pollution.

Emission sources include ships docked at the terminal, fuel used in cargo-handling equipment, and the various forms of transportation, particularly trucks, that intersect at ports to take goods to their destination.

Due to ports’ vital roles in the distribution of cargo, improving their sustainability will inevitably reverberate to every element of the supply chain.

Green ports v Freeports: the path to Net Zero

The Scottish Government is developing plans to establish ‘green ports’ which adapt the UK government’s ‘Freeports’ model.

In an English context, the UK Government recently ran a Freeports bidding process. It received 18 bids and, applying detailed assessment criteria, eight Freeports were selected, across a geographical spread. The policy always envisaged that there would be at least one Freeport in each of Scotland and Wales.

It had been anticipated that the prospectus for the Scottish bidding process would have been issued prior to the Scottish Parliament’s dissolution on 24 March, in advance of the 6 May election.

A UK /Scottish Government disagreement regarding the ‘greening’ of the policy, to include criteria on fair work and Net Zero, has however caused delay.

There is also disagreement over the level of seed funding that green ports will receive, with English Freeports estimated to receive up to £20 million each.

Nonetheless, it is likely that common sense will prevail on all fronts and that a process will run which will result in two Scottish green ports being selected this summer.

What is a green port?

A green port is a large zoned area within a defined boundary which includes a rail, sea or airport. Green port operators and businesses in the zone can benefit from a package of tax and customs incentives.

Assuming that the Scottish Government wins its argument with the UK Government, it will also have to adopt Fair Work First criteria, including ensuring that employees are paid fairly, and be fully committed to achieving Net Zero.

Green ports aim to achieve five key objectives:

• promote regeneration and job creation through inclusive and sustainable growth;
• establish hubs for global trade and investment;
• contribute to a just transition to a net zero economy;
• drive fair work practice; and
• foster an innovative environment.

Shipping: the path to Net Zero

Regardless of whether a port is established as a green port or not, if Scotland is to achieve Net Zero, all ports will need to play their part and strive to be more sustainable. A transformation of the shipping industry, as well as port infrastructure, will be necessary.

There are many ways that ports can offer cleaner energy alternatives to reduce the carbon footprint and emissions of ships.

While certain fuels are phased out, the transition will present opportunities for new technologies that can increase energy efficiency (e.g. propulsion devices such as modification to the propeller; changes to the ship design; main machinery and engine modifications) as well as alternative fuel and energy sources and related machinery (e.g. wind propulsion, solar, battery, shore power, Biofuels, renewable hydrogen, electro fuels).

A large-scale change is needed generally to enable even a sub-section of the fleet to use a low emission alternative fuel or energy source. This is because, as well as there being issues of compatibility with existing fleet machinery, air pollution technology and energy storage technology, the land-side infrastructure and supply chains for the fuels need to be in place and widely available.

Even shore power connections for ships to use when in berth place significant extra and variable power demands on the grid and therefore require further infrastructure development.

A significant increase in electricity demand is anticipated which would require ports to invest in charging infrastructures.

Most of the alternative fuel and energy options require more space for energy storage than existing fossil fuels. Accommodating different vessels and shipping patterns will require flexibility.

Let the bidding commence

Any day now, hopefully, the Scottish Government, in partnership with the UK Government, will be seeking green port proposals from applicants, or multi-applicant partnerships.

There awaits much hard work on the part of bidders to achieve high scores against the set criteria for the likely two prizes.

Burness Paull has a long-established and highly-regarded Ports and Harbours group led by Chris Mackay. Combined with the firm’s specialist renewable energy team led by Peter Ward and Neil Bruce, we can help you make the most of new opportunities in the marine sector. Get in touch to find out more.

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