Background
The UK Government has been designing a new and bespoke Freeport model for the UK over the last few years. It has described its Freeport programme in the following terms:
“Freeports are a flagship government programme that will play an important part in the UK’s post-Covid economic recovery and contribute to realising the levelling up agenda, bringing jobs, investment and prosperity to some of our most deprived communities across the four nations of the UK with targeted and effective support.”
A Freeport is a secure customs zone, located at a port (whether sea, air, or rail), which benefits from different (typically relaxed or reduced) customs rules, tax duties and administrative burdens, despite being located within a country’s land border. These zones are therefore generally aimed at creating and encouraging economic activity.
Green Freeports
In 2020, the UK Government consulted on the prospect of establishing multiple Freeports in the UK. However, the Scottish Government initially resisted this idea extending to Scotland and decided to take a different approach based around low-emission industries and fair work practices.
After months of disagreement, a landmark agreement was reached which will see both the UK and Scottish Government collaborating to deliver two ‘Green Freeports’ in Scotland, supported by £52 million in UK Government funding. Unlike in England, applicants are required to show their commitment to reaching net-zero by 2045 (Scotland’s legally binding deadline) and to offering high quality employment.
>On 25 March 2022, the shared vision for Green Freeports was set out and the bidding process opened for the two available sites which will close on 20th June 2022 at 10am.
The freeport designations will ultimately be awarded through an open, transparent and competitive process, which has been detailed in the published prospectus.
Bidding Prospectus
The prospectus gives further details on the model and sets out how bidders can apply, alongside the essential criteria they will need to meet to be successful.
Acceptable bidders will need to show how they will contribute towards delivering on the 4 main objectives of the model, which include:
- promoting regeneration and high-quality job creation;
- promoting decarbonisation and a just transition to a net zero economy;
- establishing hubs for global trade and investment;
- fostering an innovative environment.
The competitive application process is already underway with various notes of interest having been submitted for the coveted zones.
The bids will be assessed by officials working together from both governments, with ministers having an equal say on the final selection.
Bids
Multiple ports in Scotland have expressed an interest in bidding for the special status, including those at Dundee, Grangemouth, the Clyde and the North East.
Opportunity Cromarty Firth (OCF), a collaborative partnership of private, public sector and academic bodies, have also recently launched a bid in the ongoing competition. The port facilities at Invergordon and Nigg on the Cromarty Firth have been particularly prominent in supporting offshore wind projects in Scotland.
The winning bids are expected to be announced in summer and the two Green Freeports established by spring 2023.
Comment
The two available Green Freeports are clearly going to be hotly contested in light of the number of confirmed bidders. Each of the locations is likely to have different strengths and objectives and it will be interesting to see which approach is preferred when the successful bidders are confirmed.
Article co-authored by Amy Hammond, Trainee Solicitor at CMS.
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