A £200 million plan to build a carbon capture and storage project in north east Scotland has been scrapped in order to fund an increase in defence spending.
While projects in Teesside, Merseyside and North Wales have been prioritised, and grant funding for the Viking project protected, the Acorn project at St Fergus, near Peterhead, has been left without a confirmed funding commitment.
Instead, ministers say they are exploring whether private investment, government loans or equity funding could support its future development.
Russell Borthwick, chief executive at Aberdeen & Grampian Chamber of Commerce, said: “This is yet another hammer blow for the North-east Scotland economy and comes only a year since former Energy Secretary Ed Miliband said the UK Government would put ‘its money where its mouth is’ and back the Acorn Project, protecting 15,000 North Sea jobs. All talk, no action, like so much of the transition we were promised by this government.”
Adrian Johnston, tax manager at accountants MHA, added:”This is a significant setback for the North-east of Scotland, leaving Acorn’s future uncertain and undermining business confidence in the region’s energy transition.”
Seamus Logan, MP for Aberdeenshire North and Moray East – the home of the Acorn site, said: “This is the gravest betrayal of Scotland’s energy sector and is an utter disaster for our energy security, our net zero ambitions and for Scottish jobs.
“This treacherous decision comes after explicit and repeated commitments from the UK Labour Government who previously assured workers and the industry that capital was secured.
“Acorn will now be listed alongside Grangemouth and Labour’s tax on Scotland’s energy – a list that depicts the shameful destruction of Scotland’s industrial base by the Labour Party.”
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