The term ‘Green Freeports’ has been chosen to reflect the Scottish government’s net zero aspirations. The UK government will continue to use the term ‘Freeports’ for its programme in the rest of the UK. Freeports are special areas within the UK’s borders where different economic regulations apply. Freeports are centred around one or more air, rail, or seaport, but can extend up to 45km beyond the port.

The two governments will now develop a prospectus for applicants and will have an equal say throughout the assessment and selection process. A finalised joint prospectus and joint assessment process is expected to be published in March with winning bids announced over the summer.

Applicants for Scotland’s freeports will be required to contribute towards a transition to net-zero emissions by 2045. They will be required to set out how they will support high-quality employment opportunities that offer good salaries and conditions, and how fair work practices will be embedded in the green freeport area.

As a result of the negotiations, UK Ministers are expected to provide up to £52m in seed funding to help establish Green Freeports in Scotland. This is in line with funding offered to freeports across England.

Economy secretary Kate Forbes said: “I am pleased we have been able to reach an agreement on a joint approach that recognises the distinct needs of Scotland’s economy and enshrines the Scottish government’s commitment to achieving net-zero and embedding fair work practices through public investment. 

“The Scottish government will have an equal say on all bids, and will expect bidders to adhere to fair work practices including payment of the Real Living Wage.

“Scotland has a rich history of innovative manufacturers and so as we look to grasp the many opportunities of achieving net-zero, the establishment of internationally competitive clusters of excellence will help us create new green jobs, deliver a just transition and support our economic transformation.

“We can only seize Scotland’s economic potential if we create secure, sustainable and satisfying jobs that also help build a fairer, more prosperous economy for everyone. That is my absolute priority and establishing Green Freeports will be integral to achieving this.”

Levelling up, housing and communities secretary Michael Gove said: “This is a truly exciting moment for Scotland, and I am delighted we will be working together with the Scottish government to set up two new Green Freeports.

“Green Freeports help inject billions into the local economy, while levelling-up by creating jobs for local people, and opportunities for people all over the UK to flourish. 

“By collaborating using opportunities like Green Freeports we can work to level-up the whole of the UK and bring benefits and opportunities to communities that need it most.”

The Scottish government will support the significant tax reliefs that will be made available to Green Freeports through devolved tax levers, including rates relief. HMRC will also support the initiative via reserved levers including enhanced tax allowances, Employer National Insurance relief and customs duty reliefs.

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