A multi-million pound Barnett formula transfer will be used by the Scottish Government to help high energy usage businesses cut emissions.
The £26m sum, which is separate from funding already announced by the UK Department of Business Energy and Industrial Strategy (BEIS) for England, Wales and Northern Ireland, will be used to support Scottish businesses decarbonise following the Covid-19 pandemic.
Scotland’s portion of the Industrial Energy Transformation Fund (IETF) will be spread out over four years.
It is intended to help large businesses, small and medium enterprises, think thanks and trade associations.
But UK Government Minister for Scotland David Duguid yesterday cast doubt on whether the Scottish Government would “opt-out” of the £26m UK Government scheme.
He claimed Scottish businesses “will miss out on bidding for part of a nearly £300 million pot”.
However, Scottish Energy Minister Paul Wheelhouse said he had agreed with UK Government counterpart Kwasi Kwarteng that Scotland “will administer its own portion” of the fund.
He added: “We will use the funds due to Scotland to deliver the fund in the way that works best for businesses located in Scotland, according to Scotland’s needs and in line with our support for industrial decarbonisation.
“This policy flexibility is particularly important as Scotland aims to deliver a faster, 75% reduction in carbon emissions by 2030 than the UK and net zero emissions by 2045, again ahead of the UK.
“I therefore welcome the ability to make appropriate decisions on spending here, in Scotland.
“In the coming weeks we will convene a focus group with relevant trade associations and industry bodies across our energy intensive sectors to consider how best to drive industrial decarbonisation, at pace, in Scotland at this challenging time.”
This month, the Scottish Government unveiled a £62 million support package to help oil and gas firms undertake a clean energy recovery from the Covid-19 crisis.
The cash, focussed on north-east Scotland, is being made available over the next five years to help the industry deal with the “dual economic impacts” of the pandemic and oil price rout.
The Energy Transition Fund will support firms in diversifying towards net zero and help attract private sector investment into the north-east.