Seòmar agus comataidhean

Now I get you. With regard to a CCUS scheme—we were just talking about oil and gas and particularly about venting—the ability to capture and store carbon will reduce businesses’ costs. If those schemes are not available to the Scottish cluster and all the industries that want to be part of the Scottish cluster, that is a real problem. However, the biggest issue is that we are missing out on a major opportunity to take carbon out of our processes and our atmosphere, which puts 2045 on a bit of a shoogly nail, as the Climate Change Committee has said time and again. Therefore, I will use this opportunity to say that we need track 1 status for the Acorn project as soon as possible.

I will just move the motion.

I move,

That the Net Zero, Energy and Transport Committee recommends that the Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2024 [draft] be approved.

It would not be an extra burden.

First, I do not know much about the Norwegian sector. If what you are saying is true, obviously the order will bring us in line with that. At the moment there is a kind of loophole, in that operators would have to use their ETS allocations to make up for flaring activities, but not for their venting of any CO₂.

It might not stop there, however. We might also look at methane emissions, which might happen in the next couple of years. I am not entirely sure whether the Norwegian sector includes methane as well as CO₂. It would be interesting to see whether it does—I will look into that after the meeting. However, from what you are saying, if your understanding of what the Norwegian sector does is correct, the order will bring us more in line with them.

It is slightly beyond my ken. There was a great emphasis on reducing the amount of flaring—that was the real focus. I would have to look into why venting was missed out, but the order is about correcting that and, as I say, closing that loophole so that we do not have CO₂ emissions being vented and going into the atmosphere that do not need to be.

I hope so.

The regime would be the same one that we have in relation to penalties now. There will be penalties in relation to operating without a permit. There will also be a penalty associated with underreporting, and a deficit penalty if an operator fails to surrender allowances to cover its emissions.

Another important point is that the penalties will change in line with inflation, so there will be an increase in the value associated with them. There are therefore more incentives for people not to breach any of the rules and incur any penalties; it is also about tightening up the penalty regime.

There will certainly be plenty of warning that the ETS is coming into place. We would hope that breaches would be very rare.

I will be upfront: in the three months that I have been cabinet secretary, I have not had any discussions about a carbon tax. The UK Government has obviously set out its budget, and no carbon tax was mentioned in that, either.

I note that we have the extended producer liability, which I would say is, in fact, a carbon tax on the oil and gas industry.

Given that Mark Ruskell has given me the opportunity to do so, I also note that any money or funds that are gleaned from those kinds of taxes should be used for net zero activities. It is my view that, if emitters are taxed, that money should come back to the Treasury and be allocated to net zero efforts—to the big, expensive things such as decarbonising heat in buildings or decarbonising the gas grid. That is for the UK Government to decide, but, again, I have not had any conversations about a carbon tax.

The carbon border adjustment mechanism goes alongside this. We are working with our UK counterparts, as well as the Treasury, to design the UK carbon border adjustment mechanism, so that it works alongside the UK ETS and does not have any negative impacts or additional costs on Scotland’s exporters. We are still looking at alignment with the EU ETS, and conversations about alignment with the EU are still happening.

A lot is happening in that space, but I have not had a discussion with the UK Government specifically about a carbon tax.

In fairness to the oil and gas industry, it is working hard to reduce production emissions. The order is therefore helpful, because those who are reducing their production emissions will save money as a result.

I agree with your assessment. We are setting out a five-year carbon budget for the reason that we have given, which is that it takes into account fluctuations across the five-year process. Having single-year targets would completely take away from that approach and the nuances around it, which the CCC has given the advice on.

NDCs are set by the UK Government, and there is still the notional 68 per cent for the whole UK with regard to emissions. Therefore, amendments 15 and 16 would cloud the clarity that a five-year carbon budget provides. In effect, they would mean having two different systems at the same time.

I appreciate the intention behind amendment 62, which Mark Ruskell lodged, on the broader point of ensuring that the Climate Change Committee is resourced. That was raised in the committee’s stage 1 report. Of course, the CCC is a vital partner and the Government is committed to ensuring that it has the resources and information that it needs.

However, I must emphasise that the Climate Change Committee is jointly funded by the four nations of the UK, and there are funding arrangements and mechanisms in place that make that work. Amendment 62 would make only the Scottish Government legally responsible for plugging any shortfall—however that arose—in relation to one aspect of the committee’s functions. Making one partner legally responsible for funding a narrow aspect of a body’s work is not how the arrangement works, and nor is it how it should work. I urge the committee to reject amendment 62, because the funding and capacity of the Climate Change Committee are a matter of joint deliberation between the four Governments across the UK.

Amendments 64, 49 and 50, in the name of Brian Whittle, seek to prevent the Scottish Government and this Parliament from deciding that various functions under the Climate Change (Scotland) Act 2009 should be carried out by a body other than the UK Climate Change Committee or a successor body set up by the UK Government. The Scottish Government has no intention of anyone other than the UK Climate Change Committee carrying out such functions. However, when it passed the bill that became the Climate Change (Scotland) Act 2009, Parliament decided to provide a mechanism for another body to be appointed, should it ever be deemed appropriate. That included allowing for a specific Scottish climate change committee to be set up, and Parliament reaffirmed that decision in the Climate Change (Emissions Reduction Targets) (Scotland) Act 2019.

There was no discussion at stage 1 of this bill about reversing those decisions of the Parliament, and I see no reason why the committee should be called to do that today. That question was not posed in the committee’s evidence-taking process.