Some of the money will be used to position the North East as a hydrogen model region

The Scottish Government has launched a £62m (€69m) fund to help the energy sector recover from the dual economic impacts of Covid-19 and the oil and gas price crash.

The 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 government said.

The investment, with a focus on the North East of Scotland, underpins the region’s ambitions to become a world leader in the transition to net zero, it added.

Major projects to be considered for funding include a global underwater hub, a net zero solution centre, a hydrogen hub, the Acorn project and an energy transition zone.

The fund would aim to position the North East of Scotland as a hydrogen model region.

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, the government said.

Economy Secretary Fiona Hyslop (pictured) said: “This is an extremely difficult time for our business community and we recognise the need to do all we can to help the recovery of key sectors of the economy and Scotland’s regions.

“This package of investment for the North East will support our energy sector as it recovers from the impact of Covid-19 and will help us make significant progress as we move towards net zero by 2045.

“Aberdeen is recognised globally as a centre of excellence in oil and gas and this funding will help ensure that the knowledge, skills and expertise it has to offer will play a vital role in the energy transition.

“It is vital we move quickly to seize the opportunity to take forward a green, low-carbon recovery and support the workforce as the energy sector diversifies.

“Now is an opportune time to re-imagine the Scotland around us and to begin building a greener, fairer and more equal society and economy focused on wellbeing.”

Scottish Renewables chief executive Claire Mack said: “Today’s announcement of a £62m fund to help the energy sector accelerate its transition to net-zero emissions is welcome, particularly in its reiteration of the importance of pursuing a ‘green, low-carbon recovery’ from the coronavirus pandemic.

“It is vital that recovery does not ‘lock-in’ fossil fuel extraction, as we have seen in the aftermath of previous economic shocks.

“Doing so would endanger progress towards our climate targets and miss out on the opportunity to use renewable energy technologies to increase wellbeing and deliver increased socio-economic opportunity across Scotland.

“We are particularly interested to hear more details of how an energy transition zone could focus on low-carbon manufacturing, and would see this as a way of using Scotland’s engineering skills to lower the cost of key technologies like floating wind, wave and tidal power and create opportunities for Scottish supply chain companies.”