Green Freeports: local impact, global opportunity

In partnership with Prosper, we hosted an event recently showcasing the opportunities presented by Scotland’s two new Green Freeports. Prosper is Scotland’s leading membership body bringing together government, business and civil society.

This event builds on a report we published last year on the opportunities we were hearing at a time when both organisations were still to present their full business cases to the UK and Scottish governments, but the opportunities were clear to see at that relatively early stage.

You can read our report here.

(Video: Chris Kerr, head of Harper Macleod’s Marine Economy team, talks about the opportunities presented by the Green Freeports, community benefits and international investment. Viewing time 4:30)

Fast-forward 12 months, and with both Green Freeports now operational and “open for business” from a tax site perspective, where are we and what did we learn by bringing key stakeholders together again?

We were joined by the chief executives of both Green Freeports, Sarah Murray from Forth and Calum MacPherson from Inverness and Cromarty Firth, as well as Allan Maguire, Head of Development at Highland Council, and Mike Engelbrecht, Vice President of Sumitomo UK Electric Cables, an early investor in the Highlands.

As well as presentations by both chief executives on the strategic ambitions of their respective organisations, a panel discussion covered a wide variety of issues including the planning system, housing provision, Scottish and UK Government support, global positioning and competition, partnership working, and community involvement and benefit.

Guests, exhibitors and contributors included port authorities and operators to construction companies, renewable energy developers, policymakers and elected representatives, academia, skills and economic development, making for a comprehensive, inclusive and well-rounded discussion.

The following article, without attributing any comments to individual speakers and attendees, provides a summary of the key discussion points.

The opportunity

The word “opportunity” was perhaps the most used throughout the discussions, particularly the opportunity to create real impact for Scotland and the rest of the UK, and:

• To create thousands of long-term careers, not just jobs
• To revitalise neglected areas to create new, sustainable, inclusive and empowered communities
• To put Scotland at the heart of the world’s energy transition, not just the UK’s

Working together “at pace and scale”

There continues to be a real sense of collaboration between the two Green Freeports, summarised with one speaker noting: “You don’t need to fight for crumbs when you’re in a bakery.”

We heard that this isn’t a competition between north and south, or Scotland against the rest of the UK, but the UK against the likes of Denmark, Finland and Norway. We also heard that ports and harbours operators are coming from those countries to see what’s happening here, recognising that Scotland is on the verge of something big, and how they might partner with Scotland to compete against the likes of the US and the Middle East.

Investors want the certainty from a stable and cohesive system. We heard that investors aren’t necessarily talking about specific sites, but whole geographies and ecosystems, including the full wrap around of a mature and experienced professional advisory community. Adopting that collaborative Team Scotland approach is proving to be an attractive proposition around the world.

There is a window of opportunity but we need a “change in gear” and a “shared vision” to deliver on the ambitions.

There was a view that the role of the Green Freeports will also be to harness what is already happening and to facilitate “creative collaboration”, “interconnected clusters” of activity and “aligned objectives” – making individual initiatives come together collectively.

Similarly, we heard of live examples of the private and public sector partners working together to harness and grow the existing supply chains to deliver real impact for the long-term and generations to come.

One guest noted that the last year had felt as though there had been a lot of talking about the Green Freeports and what might happen, but it now feels as if things are actually happening and more will come quickly.

A fit-for-purpose planning environment

There was much discussion around whether local planning policies are the best approach to aiding the delivery of such a monumental opportunity for the whole of Scotland, satisfying the demands and standards of international investors.

The role of the Scottish Government to create flexibility around local planning policies was raised, particularly around the issue of housing, and the UK Government’s role in delivering on its grid capacity promises, its regulatory environment around green hydrogen and potential relaxation of migration laws when it comes to construction.

From an investor’s point of view, it’s not unexpected that they would look for a consistent, fair and transparent planning process. Early engagement between investors and developers, and with planning authorities shows what can be achieved. One commentator noted that Sumitomo’s recent investment in Inverness was “one of the best examples of inward investment I’ve ever seen.”

Community benefit and development

A key issue of discussion was around how local communities can get involved and, more importantly, how they benefit.

When it was put to the panel that, in other instance, they’ve seen energy infrastructure being built in their backyards but not seeing reduced energy costs, how is that a benefit? That’s perhaps a fair point given that Scotland is a significant contributor to the UK’s energy mix, which is only set to increase in the years ahead, but our rural communities are faced with some of the highest energy prices in Europe.

However, benefits can come in a range of forms. One panellist noted that the creation of long-term careers is a direct impact and that “community and economic development are meshed together.”

At the same time, there are already instances of skills development happening where investors or existing supply chain partners are working with education and skills providers to develop the tools which will be needed in the immediate future whether that be welding, construction or digital.

It was also recognised that community benefit isn’t just injections of cash, but the creation of new homes, communities and the vital infrastructure such as schools, health centres or cultural centres. It is widely recognised that creating new housing is a challenge, which investors are aware of, but that new ways of working are already being explored such as investors building their own new homes or partnering with contractors to build developments specific to their own needs. As another panellist put it, all we would need is twelve different pilot projects to get the ball rolling on a new way of working.

Our view

It’s clear that both teams have worked hard, at pace, and with clear focus, to reach their key milestones in a relatively short period of time. When you consider that the concept of two new Green Freeports was only announced in February 2022, for both sites to be technically open for business less than three years later is no mean feat given significant political and economic turbulence. Even the initial process of bringing together bids teams and the bidding process was conducted under covid-restricted workplace conditions.

It’s to both teams’ absolute credit that they have maintained their focus and momentum, which will undoubtedly be needed to capitalise on the opportunity, particularly at a time when the new Labour government appears to be working hard to drive international investment. A joined-up, Team Scotland narrative, with a fair and flexible planning system will surely only make the Scottish Green Freeports an attractive and compelling proposition.

We often hear of the need for greater collaboration to deliver projects of significance, but that’s easier said than done. However, in this instance, we can see what can be achieved by working together, with no individual agendas brought to the table, and partnerships created for the greater good. Is this a case of a rising tide lifts all boats?

This article forms part of Harper Macleod’s Marine Economy Week 2024, examining a diverse array of Scotland’s rich maritime sector and its supply chain.

Find out more about Marine Economy Week here and to register for more insights and events, including a live webinar with Claire Mack, chief executive of industry body Scottish Renewables, and Ashley Fleming, the head of Harper Macleod’s immigration practice. Claire and Ashley will be discussing people and skills shortages in the renewable energy sector, and the government’s latest position on immigration policy when it comes to the skilled worker visa.