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£62 million fund for energy sector announced

12 June 2020

Support package to help deliver net zero future

A multi-million-pound fund has been set up to help the energy sector recover from the dual economic impacts of coronavirus (COVID-19) and the oil and gas price crash.

The £62 million Energy Transition Fund will support businesses in the oil, gas and energy sectors over the next five years as they grow and diversify and will help attract private sector investment in the region.

The investment, with a focus on the North East, underpins the region’s ambitions to become a world leader in the transition to net zero, helping Scotland meet its ambitious targets on climate change.

Major projects to be considered for funding include a Global Underwater Hub, Net Zero Solution Centre projects, a Hydrogen Hub, the Acorn project and an Energy Transition Zone.

The investment will also benefit the wider Scottish energy sector and supply chain, working with local businesses to support sustainable jobs and maximise inclusive economic growth across the country.


This funding package is available to support Net Zero projects, including:

  • A Global Underwater Hub focused on helping our subsea and underwater sector grow with a focus on diversification and export support. 
  • A new Energy Transition Zone business park adjacent to the Aberdeen South Harbour.
  • A range of innovation projects led by Oil and Gas Technology Centre’s Net Zero Solution Centre.
This will also position the North East of Scotland as a Hydrogen model region, contributing early funding to projects including: ACORN CCS & ACORN Hydrogen; Aberdeen Vision; and the Aberdeen Hydrogen Hub.

  • ACORN Hydrogen, located at the St. Fergus gas terminal, seeks to produce hydrogen from Natural Gas and the linked ACORN CCS project would capture and store the CO2 safely and permanently in North Sea reservoirs.
  • The Aberdeen Hydrogen Hub presents the opportunity to use green hydrogen in the transport sector, with early opportunities including buses, Council vehicles and commercial vehicles.
The Scottish Government will engage with stakeholders and partners in the development of business cases for these projects.  

The Scottish Government will also work collaboratively with the UK Government and industry to ensure that this funding supports an Oil and Gas Sector Deal, placing the industry in a global leadership role as part of a Net Zero future.

Response from leading industry figures

Chief Executive of Subsea UK Neil Gordon said: "Today’s announcement recognises the tremendous scale and potential of underwater engineering and technology as a valuable, standalone industry sector. By creating a world-class Hub, we can ensure the UK remains the global centre of expertise.

"We welcome the funding from the Scottish Government who have been supportive of the proposition for the Global Underwater Hub and the subsea industry in general.

"Working with government and other stakeholders, we’ve developed a compelling business case for the Hub which underlines the significance of the UK’s underwater engineering and technology sector and demonstrates how it can continue to lead the way around the world, support the energy transition and capitalise on the Blue economy.

"The worldwide underwater engineering market is expected to grow significantly – annual global spend could be as much as £140 billion by 2035. The UK has the competitive edge and has a real opportunity to gain a larger share of this growing market.

"While Aberdeen is home to the majority of underwater engineering and technology companies, there are significant clusters across the UK, including Scotland’s central belt, the North-East England and South of England, supporting a range of sectors including offshore wind, marine renewables, aquaculture, oil and gas as well as defence.

"As the industry’s trade body, Subsea UK has been central to the development of the Hub concept, working in partnership with industry, governments and academia and we will lead the delivery of the Hub."

Chair of the Global Underwater Hub and ONE Energy Trevor Garlick said: "We welcome today’s Scottish Government funding announcement for the energy sector in North East Scotland, which includes support for a Global Underwater Hub in Aberdeen to harness the huge potential the UK’s world-leading underwater engineering and technology expertise.

"The multi-sector Hub will help UK companies win more business overseas, attract inward investment and develop the skills and technologies needed to increase our share – currently £8 billion – of a growing global market with a gross annual spend expected to reach c.£100 billion by 2035.

"It will play a significant role in furthering Scotland’s and the UK’s net zero ambitions, connecting companies, universities and R&D institutions across the UK to leverage the collective strength of the UK’s underwater industries – from offshore renewables and oil and gas, to marine science and defence.

"We look forward to continuing to work closely with underwater engineering and technology companies, Subsea UK and other trade associations, governments, academia and regional development agencies to deliver this exciting project.”

OGA Chief Executive Dr Andy Samuel said: "The OGA welcomes this commitment which will play an important part in the green recovery, support jobs and contribute to our net zero ambitions. With the North East of Scotland’s existing expertise, infrastructure and subsea engineering excellence, it’s well positioned to take advantage of the opportunities of the energy transition and help advance exciting innovation in game changing solutions like carbon capture and hydrogen.”

Image courtesy of Global Marine Group