The next item is a statement by the Minister for Economy: a greener economy. I call on the Minister, Vaughan Gething.

Thank you, Deputy Presiding Officer. Last month, I delivered an oral statement on how we plan to move the Welsh economy forward. I set out the action that we will take to build a stronger, fairer and greener Welsh economy. All of the issues that we discussed that day hinge upon our success in confronting the existential threat that climate change represents. Just as the reach of the threat is enormous, so too is the opportunity to create a brighter future for Wales with the economic security that comes with taking urgent action today.

The net-zero Wales plan published last week demonstrates how far-reaching action across Government will bring about a Wales that gives to our planet more than we take. The Climate Change Committee has been clear that Wales can meet its ambition for net zero by 2050, if everyone plays their part. The industry and business chapter of our plan outlines a vision focused on sustainability, fair work and the industries and services of the future.

The plan makes clear that by 2025, we expect to see a decrease in energy usage in industry of 4 per cent as a result of energy efficiencies. By the same date, we also want to see an increase in electrification in industrial processes by an average of 3 per cent, as well as growing hydrogen as a fuel by an average of 3 per cent.

We know that in Wales the stakes are high, as we have lived through the sharp end of de-industrialisation. Our geography, topography and heavy carbon infrastructure have long been regarded as vulnerabilities. However, we now have an opportunity to turn this challenge on its head by promoting Wales as a home and a test bed for economic renewal.

Just last month, I was delighted to announce an investment that is putting this promise into practice, as the smart energy company, Thermify, confirmed its new facility in Pencoed. This is inward investment that has been attracted by leading Welsh innovation backed by this Government. Thermify uses Raspberry Pi processors produced in Pencoed and will be collaborating closely with the SPECIFIC centre—that's Swansea University’s leading energy tech research hub.

This makes Wales home to a groundbreaking low-carbon heating system designed to provide homes with affordable heating and hot water. From research to application, our support has brought together Welsh and global innovation to deliver the high-tech and low-carbon industry that will help to shape the future. This is what Welsh innovation with global impact looks like, and I want to see more home-grown responses to shared global challenges.

The UK Government can help to unlock another urgent opportunity by providing the funding needed to make our coal tips safe. A fully funded, 10-year joint programme would allow us to work on the jobs, the tech, the engineering and the skills required to make Wales a leader in industrial remediation.

The United States has already started to take this approach to cleaning up its dangerous industrial legacy in states like West Virginia. Their plans to revitalise industrial communities mean that new federal funding is being directed to create jobs and projects, in a model that, thus far, the UK Government refuses to even entertain for Wales's valley communities.

Deputy Presiding Officer, the Climate Change Committee's Wales progress report made it clear that a coherent UK industrial strategy is needed to allow Welsh industry and business to maximise their contribution to net zero. Our plan includes important asks of the UK Government, reinforcing the need for long-term and consistent policy, support for innovation, and global leadership in action. From clarity for business on regulation and funding to action on fuel switching and carbon pricing, our calls demand a coherent framework that all of us can use to plan against. With the right framework, business and industry in Wales would finally have the certainty they need to accelerate their own ambition. For instance, ring-fenced UK funding for early-stage marine projects could end the rolling uncertainty that leaves projects on the shelf as investors still lack the confidence needed to move at pace.

Similarly, Wales needs to get its fair share of the revenue raised by the emissions trading scheme, reflecting the greater task our economy faces, given our reliance upon energy-intensive industries. UK Ministers should also work with Ofgem to ensure that network investments target more deprived communities to boost local economic development here in Wales.

During my oral statement on 19 October, I made it clear that the UK Government must act urgently to bring forward its deal to support a just transition for our steel sector. We will work with all partners to explore the best possible joint approach, but that can only come alongside an agreed deal that is offered by the UK Government.

Our programme for government has commitments on fair work, the foundational economy and support for co-operatives and social enterprise in Wales, and that also complements our net-zero ambitions. When we increase the number of and the support for green reps at work, more businesses can draw on the expertise of the workforce to find new ways of reducing emissions. Our foundational economy delivery plan is fundamentally about using existing and new economic activity to shorten supply chains and thereby help to reduce emissions.

Dirprwy Lywydd, Wales is a global leader in recycling—an achievement that we should all be proud of and an achievement that we can build on to accelerate our transition towards a circular economy. The pandemic and Brexit have challenged the resilience of our supply chains, but our world-class recycling gives us an opportunity to create yet more value from the resources that we collect. It also means that we can use recycled material to substitute for carbon-intensive processes and the extraction of raw materials. We’ll therefore be bringing forward new business recycling regulations to deliver further carbon reduction and to secure high-quality material to turn into new products. We’ll also expand our support to manufacturers to use recycled content. Capital Valley Plastics in Torfaen are a good example—they transform plastic film into new damp-proof courses for use in buildings, demonstrating how Welsh businesses can lead the way in remanufacturing from the recycling collected here in Wales.

We’ll also continue to work together to understand the needs of employers in relation to net-zero skills and to understand how we can support workers to take advantage of these changes. Our employability and skills strategy, which will be published in early 2022, will ensure that our system is fit for purpose in meeting the skills that a net-zero future demands.  

Wales's business community, including our small and medium-sized enterprises, will need to incorporate energy and resource efficiency alongside new technology and new ways of working to remain competitive. So, we’ll strengthen the approach of Business Wales with enhanced information and support designed to help businesses meet these challenges. And we'll also be using our refreshed economic contract to strengthen our something-for-something approach, challenging those we support to ensure that Welsh public money is used to contribute to our journey to net zero. We will deepen the requirements with clear indicators and minimum standards that must be met to achieve a contract.

This is a snapshot of the broader plans in Net Zero Wales, and I look forward to working with all of you across this Chamber to deliver on our collective ambition to meet this era-defining emergency. 

Conservative spokesperson, Paul Davies.

Diolch, Dirprwy Lywydd, and can I thank the Minister for his statement this afternoon? Of course, I share the Minister's commitment to developing a greener economy, and he will have heard me call for action on this front on several occasions. We need to build momentum from the ground up to deliver the behavioural and cultural change needed to develop a green economy, and at the heart of that is a need to better understand, plan and develop our skills base, and I'm pleased that today's statement recognises just that. Now, the Minister will be aware that I've called for a net-zero skills audit to take place so that we can identify the gaps in skills, knowledge and resources, and so perhaps the Minister will confirm today that a net-zero skills audit is in the pipeline and tell us more about the progress of that audit and the Welsh Government's plans to ensure that we have the skills we need in our workforce to develop a green economy for the future.

Today's statement refers to support for businesses across Wales, and I'm keen to understand more about exactly how the Welsh Government is mobilising private finance to support clean and resilient growth in Wales, and so perhaps the Minister can confirm exactly how that is taking place. I've had many discussions with businesses and business organisations about developing a greener economy, and they've made it clear to me that the Welsh Government's direction of travel can seem impractical for businesses, many of whom have little specialist resources. Therefore, it's crucial that the Welsh Government develops specialist business support in this area and explains to businesses, particularly small businesses, exactly what they can do and how they can do it. Therefore, I hope the Minister will take the opportunity today to tell us exactly how it will support businesses to develop greener practices, how it will engage with businesses much more directly on this agenda, and also how it will help make a greener economy something much more relevant and accessible to our smaller businesses.

Now, I'm disappointed to see that there's no mention of the need to deliver better green infrastructure across Wales. Much more needs to be done to engage with businesses in relation to electric vehicles, for example. Wales has just 3.8 per cent of the UK's total charging points, putting Wales tenth out of the 12 nations and regions of the UK, and businesses have made it clear to me that there is a lack of knowledge about commercial vehicle options, concerns about the range of vehicles, and, above all, real concerns that suitable charging infrastructure isn't in place here in Wales. I'm sure the Minister will agree that, until those issues are addressed, businesses are less likely to make a significant shift, and yet we know that there are already plans in place to phase out diesel and petrol engines within the next decade. Therefore, perhaps in responding to this statement, the Minister will tell us more about how the Welsh Government is accelerating the provision of electric vehicle infrastructure here in Wales.

Now, the statement refers to the resilience of our supply chains, but it's important that this is supported by genuine engagement with businesses, with banks, with local authorities and, indeed, with industry representatives. Therefore, perhaps the Minister can tell us what discussions he's had with the banking sector and local authorities on the ways in which they can help support businesses across Wales and help deliver greener, more sustainable supply chains.

Dirprwy Lywydd, I want to ask the Minister about action taken to change consumer behaviour and what steps the Welsh Government is considering taking, or already taking, in this area. We can learn a lot from other countries across the world. For example, Sweden have a strategy for sustainable consumption that aims to help people make climate-smart choices. It's vital that Wales is learning from other countries and so I hope the Minister will be able to tell us what strategies the Welsh Government is considering to change consumer behaviour and what lessons are being learnt from other countries on this specific issue.

The Minister will undoubtedly be aware of the growth in e-commerce in recent years, and that too has a carbon footprint, as more vehicles are on the road delivering goods and more cardboard is being used. Perhaps the Minister can tell us how the Welsh Government is monitoring the carbon footprint of e-commerce in Wales and tell us what discussions are being had with the distribution industry about how it can support efforts to tackle climate change.

Now, today's statement also refers to decarbonising our steel sector, and I'm pleased to see the UK Government commit to this agenda by providing £315 million to the industrial energy transformation fund and £250 million to the clean steel fund. However, the Welsh Government also has levers at its disposal to help support the sector, and we've previously talked about investing in innovative solutions. Therefore, perhaps the Minister will confirm how much the Welsh Government has provided for research and innovation to the sector to explore breakthrough technologies that could help the sector produce steel in a much more carbon-neutral way.

So, in closing, Dirprwy Lywydd, can I thank the Minister for his statement today, and again commit to working constructively with him on this agenda to make our economy more sustainable, resilient and greener for the future? Thank you.

Thank you for the series of questions. I'll do my best not to try the Deputy Presiding Officer's patience by giving long answers to the significant number of questions; I'll try and be as succinct as possible. Next year, I expect, when we're announcing what we're doing on skills, you'll have a significant section on what a net-zero skills plan looks like. I had an opportunity to meet with regional skills partnerships today, and it's part of what we're looking for, but, actually, we do need to have some more clarity—or we'll have to return to this time and time again, I'm afraid—on what the future funding landscape for skills investment looks like, because replacement European Union funds—. The budget was not clear on what will happen with broader levelling-up funds, because those funds, of course, funded about a third of our apprenticeship programmes, so there is a need to understand the funding available. But we're committed to working alongside businesses, as well as providers, to understand what we'll need to do. So, that is both looking at current provision, looking at where gaps, but also where opportunities, exist as well. 

On your point about private finance, we already have access to private finance and how that is being deployed. Now, much of private finance provision isn't particularly interested in the environmental impacts of investment; they're rather more interested in growth and return. But we do know that there are people who are more interested in doing so. We also know that the British Business Bank recently announced a specific equity fund as part of the budget. That was a surprise, I think, to them and to us. We'd called for something like that, so it's a welcome step forward in the Chancellor's announcement, and we'd want to see that fund deployed in conjunction with what we're already doing with the Development Bank of Wales, who certainly will be looking to provide investment into helping businesses both to decarbonise, but also to take up opportunities in the way that the world of work is changing. And we're already asking for a constructive meeting between ourselves and the Government and the development bank and the British Business Bank to try to take that forward in as constructive a way as possible.

You asked a number of questions that, I think, come together on procurement, supply chains and also the way in which we're looking for Business Wales to support small and medium businesses in particular. We are certainly looking to do more of that. Again, Business Wales funding is partly reliant on replacement European Union funds. Now, you've heard me make that point before, but it's a simple fact. We're looking, as part of that, to think about not just how we help them to think about opportunities, but also, for those business that do want to have an economic contract or already have one—and there's a range in the small and medium sector who do that—we are very clear that, in the current contract, the journey to decarbonise is part of it; it's one of the four pillars. And in strengthening the contract, you'd expect to see that enhanced as well. It's part of the work on not just the economic contract, but part of that also is the opportunities to shorten supply chains, which I mentioned in the statement. And I also did mention, of course, Business Wales's role.

We're looking, actually, about how businesses understand the imperative from consumers as well, and from their customers. Many of them now expect to see the way in which they're planning for the future. And it isn't just in the e-commerce sector that you referred to, where that's already a clear expectation that a range of those providers are looking at what their own footprint is, it's in a range of more physical goods and services sectors as well. 

And on transport, there are conversations that we'll have with colleagues in the climate change ministry about the charging infrastructure. It's also an area we could do with a joint plan across the UK for what charging infrastructure will look like, and it is one of the disappointments that I'm sure the Member will share, that, in the recent budget and spending review, there wasn't a significant investment in infrastructure to help with the decarbonisation journey. You heard Julie James mention that climate wasn't mentioned once in the budget, but, more than that, the capital budget that this Welsh Government has and that this place will have the opportunity to scrutinise and help to direct, is actually going to fall in real terms over the period of the spending review. And for all of us, on all sides of this Chamber, that cannot be a positive statement that helps Wales to make an even more rapid contribution to creating the infrastructure to help us decarbonise the way we live here in Wales.

I will try and finish now on the points about steel, Deputy Presiding Officer. There are some positive steps that the UK Government have made on trying to help and incentivise a move forward. We work alongside those, but also the investment that we have helped to create, together with the funding that Swansea do on the future of metals. But, actually, the bigger challenges on decarbonising steel are both about its competitiveness—and there's an issue there about energy prices in this country compared to European competitors—and, in particular, investment—and these are choices we need to make, but largely the UK Government needs to make—in hydrogen and also the potential for carbon capture. Carbon capture and storage is not a mature technology, so it's not going to help in the here and now, but it's a possibility for the future. There needs to be investment now to see if that's possible. Hydrogen is much nearer to being mature, so increasing the investment in hydrogen production and infrastructure is really important in general, but really crucially important if we're going to decarbonise the steel sector and have a just transition in doing so. We recognise it's a high-value, but also a high-emitting sector of the economy, so it's one of the points that I've regularly raised and will continue to raise with the UK Government, as well as the opportunities to see further decarbonisation in other forms of production. So, I think energy prices don't need to mean that steel has to be a high-emitting sector. We think the sector here is making real strides forward in wanting to decarbonise, but to do so in a way that doesn't cost a significant amount in terms of jobs and employment.

Plaid Cymru spokesperson, Luke Fletcher.

Thank you, Deputy Presiding Officer, and thank you, Minister, for your statement this afternoon. If I may say, as a Pencoed boy, I look forward to seeing what the partnership between Thermify and Swansea University will produce. It crucial that we discuss what the Welsh Government can do, particularly during COP26, and as part of what the Government can do, the economy is central, of course.

There is a huge concern that COP26 will just be another talking shop, and I have to say I am one of those who are concerned, which I'm sure isn't a shock to Members who I've worked with since being elected. My colleague Siân Gwenllian regularly tells me I'm far too cynical for my age, but there appears to be a reluctance to come down hard on multinational companies, for example, that place greed and profiteering ahead of the environment and our future generations.

The Carbon Disclosure Project found that in 2017, just 100 firms could account for 71 per cent of global emissions since 1988. Any localised efforts to support green initiatives in Wales will be lost if we do not tackle the issues of these international polluters. For example, large investment firms have been buying Welsh farmland so that they can offset their carbon emissions. At least 12 farms have been sold recently in mid Wales to companies outside of Wales. Not only is this damaging to Welsh culture and the Welsh economy, but it doesn't address the problem. These large firms are able to greenwash while still ultimately pumping huge amounts into the atmosphere. I'd be interested to learn from the economy Minister what sanctions the Welsh Government might consider against multinationals that continue to pollute post COP26 and does the Minister believe that the purchase of Welsh farms by these multinationals is a sustainable practice within the Welsh economy.

Of course, the Minister highlighted that one promising part of the Welsh green economy is hydrogen. The hydrogen development in Wales baseline report highlighted future initiatives that could harness the use of hydrogen power. The Government is yet to respond to the developing hydrogen energy sector in Wales consultation, which the baseline report is part of, or so at least I'm led to believe by the Welsh Government website. When can we expect a response and what other initiatives has the Welsh Government identified that could utilise hydrogen power, specifically green hydrogen? If the Government is serious about preventing climate change, they must act now and they must invest in the hydrogen sector of the economy that will put Wales on the forefront and provide us with a clear advantage as other countries move to greener economies.

Further, efficient transport infrastructure is vital for businesses and the Welsh economy. The FSB found that the cost of zero-emission vehicles, alongside a lack of provision of charging points, is acting as a barrier to behavioural change for businesses. Paul Davies has touched on this already, but could the Minister outline what support will be available for businesses who wish to transition to greener alternatives? And would the Government consider setting out their long-term strategy for the transition to electric and hydrogen for SMEs in Wales?

Of course, the transition to a net-zero economy in Wales without proper Government planning and funding will be more challenging for Wales than other countries in the UK. Wales has a greater share of harder to reduce emissions, as the Minister rightly highlighted. We have more energy-intensive industries, more off-grid homes and small-scale farms, and fewer suitable sites for carbon capture and storage. One in five Welsh workers are in climate-critical sectors that would be impacted by the transition to net zero, and if the Welsh Government does not prepare properly for a just transition, there will be massive economic and societal consequences. We don't want a repeat of the past. But I will repeat, of course, my previous calls and ask if the Welsh Government will establish a just transition commission, similar to Scotland's, that will monitor Government decisions around the transitioning of the economy to a greener and fairer one.

And on steel, if I could, what consideration has the Government given to steel co-operatives and the role that they could play in a greener, fairer economy, similar to what we have seen in the Basque Country?

Finally, the Minister is no doubt aware what my position is when it comes to tackling climate change. For me, tackling the climate emergency through transitioning to a green economy has to also go hand in hand with tackling poverty. The reality is that the current way of measuring economic success is not fit for purpose, if we want to measure the impact of Welsh Government economic policy on people in Wales and the environment. For decades, the economic performance and societal progress of nations has been benchmarked on GDP. Its inadequacy in measuring people's lives, well-being and environment has increasingly been recognised. In light of this, could the Minister outline what discussions have happened within the department on how we can move away from traditional measures, such as GDP, to alternatives and progressive measures?

Thank you for the series of questions and comments. On your point about land use, I think the Welsh Government's pretty clear that we expect land use in Wales to be sustainable and beneficial for local populations and the economy. So, we're looking at how we can incentivise people to make proper use of the land that's available, but to do so in a way that meets the tests that we would set. So, we're certainly not encouraging companies to try to buy land here in Wales to try to avoid and offset their activities in other parts of the UK or the rest of the world. 

On your point about hydrogen, I just want to reiterate that, of course, the First Minister made it very clear in questions today that this Government is very clear that we should be investing in green hydrogen, and that's what we want to see. And there are real opportunities within that, not just within the investment—and it is welcome investment in the HyNet process across the north-west of England through the north of Wales, but it is also the opportunity to see what also comes from the potential for offshore energy production as well and what that might mean in terms of increasing our ability for genuine green hydrogen production. Now, that requires some of the points I made in my statement: clarity on the investment framework, the ability to invest against it, and UK Government choices as well as the willingness of this Government to help people to invest in early industries. The danger is otherwise that what will happen is that we'll see what happened with onshore wind, where Denmark in particular managed to invest early and then exported technology, which meant that a lot of the gain was made in Denmark. Now, that's meant that we've got efficient ways of producing onshore wind energy, but actually I'd much rather see an opportunity to be early movers in an industry where we're already seeing some of this taking place in other parts of Europe as well. So, the investment to date in hydrogen is welcome, but I would like to see more of that take place. It's also a crucial issue for the south Wales corridor, as well as going across north Wales, too.

On your points about the challenge of how we use the economic contract and the levers within it, this matters for small, medium and larger businesses. You can't get an economic contract unless you're ready to sign up to demands that are going to be changing. So, you won't see extractive, large companies in Wales that are going to have economic contracts; they're going to need to sign up to the ways of working and to giving back to make sure that it really is something for something, if they want the support that this Government can and is prepared to provide, both to see jobs kept in Wales as well as investment to create new jobs in Wales. And that is one of the positives that a cynical young man like yourself might want to see as a positive, that there is an opportunity to create new jobs for the future that will be good jobs, well-paid jobs that can exist in different parts of Wales. We don't need to see the stripping out of highly paid employment to be replaced by much lower grade employment with lesser wages as well. And it's one of the things where we're really keen to grasp the opportunity as we look to our shared future. 

I think I've mentioned the points about working with Ministers in climate change on improving the charging infrastructure. It's a challenge we've recognised, and again there are choices we could make on a more efficient basis if we could work alongside the UK Government in doing so. That would require the sharing of an approach.

I want to make the point again on land use and your point about climate change, and some of the challenges we see. It's why I mentioned coal tip remediation in the statement, because you're seeing a Government that is determined to invest in that in the United States. Again, parts of the United States are scarred and affected by their own industrial legacy as well. They're investing in that. There's a federal Government investing in that, working with the state Government. You could see that here as well, if the UK Government were prepared to look at their responsibility and the legacy that isn't devolved to actually work with us to have a proper plan to both deal with the environmental damage and impact of that legacy, but also to see jobs and again skills that could be exported, because we think that it's inevitable that other parts of the world will have to go through the same process of remediation from coal tip and extraction over the next coming decades.

And on your point about steel co-operatives, we're actually looking rather more at the way in which steel is currently produced and our ability to work alongside the companies that are here already. We have companies in Wales and across the UK. If there are opportunities for co-operatives, I certainly wouldn't turn them down, but I don't think that's a realistic answer for the way the UK industry is currently structured. Our bigger concern is making sure that well-paid employment doesn't disappear; that we don't see a decarbonisation transition that costs lots of jobs in a way that is avoidable if we can see the right sorts of investment choices and action on energy pricing as well.

And on your broader point about indicators as well as GDP, then, yes, I am open to conversations and discussions. We've had some of those with you and some of your colleagues on what a well-being economy looks like and how we measure success, but of course we have a range of those already and what they look like with our future generations Act, how we look to try to understand, this is the footprint of what we think should work, how we should value investment, and how we will then measure our ability to make steps forward on having a genuine well-being economy here in Wales in the future.

Jack Sargeant.

Diolch yn fawr, Deputy Llywydd, and I'll extend my thanks to the Minister for his statement. I agree with him about the importance of the steel industry; if we are to move towards a green economy, then that must include localised steel production. I'm sure, Minister, you've read the report overnight of a EU-US trade deal on steel, and it is absolutely vital that UK steel has the same access to that deal. So, I'd be very interested, Minister, in your thoughts, and what this means for the steel sector within Wales.

And just secondly and finally, Deputy Llywydd, the Minister again talks about skills quite heavily in his statement today, and if we are to build the next generation of green technology and products here in Wales, it's clear that we do need the right skills. So, perhaps you could tell us how confident you are that we are training and upskilling the right people to fulfil this need. And can you confirm to the Chamber today that the conversations are not just with employers, but they are with professional bodies, such as the Institution of Engineering and Technology, and also our trade union partners across Wales and the United Kingdom?

Yes, I'll have to deal with your second question first, because that is the nature of the conversations we're having. We're looking at where other support is available, because parts of the UK Government in broader employability support is in a different place to where it was a few years ago. On the plainly devolved responsibilities around skills, yes, we are working with professional bodies as well as employers on needing to understand the sorts of skills we think we're going to need in the future of the economy. It's why I was really pleased to meet regional skills partnerships today to look at the work they're already doing, to understand that from a regional perspective as well as with sectors and the national lens that we have too. And, yes, of course we will continue to engage with trade unions on how we can deliver some of those skills, because of course, one of the things that I was most proud of in my time at the Wales TUC, when I had the opportunity to be the president and the vice president, was the work that we did through the Wales Union Learning Fund on actually encouraging people to get skills for life, but also skills for work. The trade union was often a really important gateway to get people to acknowledge they had skills deficits that they wanted to address, things they wanted to do, from basic literacy and numeracy to going on to deliver higher skills, and the access that provides to opportunities to have not just more enjoyment at work, but access to better paid and better quality work too.

On your point about the steel deal, I heard the announcement too with interest, and the details aren't entirely clear and they're emerging, but I think the initial starting point is that the removal of at least some, if not all, of the tariffs that were imposed by the former President of the United States is good news. I think that set off unhelpful retaliatory measures between Europe and the United States. We need to understand what that means for the UK. The UK is outside the deal at present. In broad decarbonisation terms, it's good news that major economies are saying, 'We want to prioritise and advantage steel that is produced in a cleaner and greener way and to prevent dirty steel being imported'—the phrase that President Biden used—'and prevent the dumping of steel'. Those are definitely things that the steel sector here in Wales is concerned about as far as the UK is concerned. I'd be very keen to see the trade discussions that should take place with the US and the European Union to mirror those terms being available to UK steel production as soon as possible. Because I think we have a comparable story to tell when it comes to US and EU steel production, and I certainly don't want the sector to be disadvantaged here. But if we can get that early access to the same terms, I think it's good news for the steel sector here in the UK, and for jobs in Wales, of course.

Thank you, Minister, for bringing forward today's statement. I certainly welcome the ambition to build a stronger, greener economy here in Wales. A key part of making and seeing that green economy a success is the role that local authorities can play in achieving this. In light of this, I was disappointed to see that local authorities and councils were not mentioned in your statement today, so perhaps you'd want to mention them in response to my points. Indeed, I heard you mention some of the hydrogen opportunities in north Wales, and I note today the excellent announcement by the Mersey Dee Alliance that they've been awarded funding by the UK Government for carbon capture and underground storage infrastructure. I'll quote from the release:

'The implementation of CCUS from 2025 will safeguard the future of thousands of high value manufacturing jobs in the Mersey Dee and

connected economic areas in North Wales'.

They go on to say that it'll create around 6,000 new jobs because of this investment in hydrogen infrastructure. I think it's an excellent example of four councils working together with other organisations to help deliver a thriving, greener economy in north Wales. So, Minister, what discussions have you had with local authorities in relation to a greener economy, and what role do you think they could play in achieving this? Thank you.

Thank you for the question and the points. I've mentioned several times, during not just the statement but questions, the welcome for the further investment in the HyNet project they're looking to deliver across north-west England and through north Wales. I've had regular conversations with both the English authorities as well as the Welsh authorities involved in the Mersey Dee Alliance, and I'm pleased that that appears to be something that is additional and not competitive with the wider work the North Wales Economic Ambition Board is undertaking, where the six local authorities have agreed on a range of priorities to help support and grow the Welsh economy across north Wales. I have a very good relationship with local authorities. I see them as integral to our ambitions for the economy, including greening the economy, and that is part of the work with each of the regional partnerships that exist.

Both the regional skills partnerships and each of the growth deals, and the new corporate joint committees that exist, I think are a practical expression of our willingness and our desire to carry on working on a regional basis. Local authorities are essential partners in doing so. It's why I've commissioned the OECD, as one of my early actions in post, to carry on working on the future for regional economic development, and I certainly think that we'll see more to come in the partnership between the Welsh Government and local authorities. It would of course be better if we were able to have more certainty in the framework as to how we can work together with the funds that have yet to be made clear from the UK Government—the levelling-up funds. But I'm sure we'll have lots of opportunities to talk about those in the future.

I just wanted to pick up, Minister, on your point around coal tips, and I wanted to ask if I'm to take from your comments and the statements that discussions with the UK Government last week therefore failed to reach an agreement over who would pay for this work. Is it not therefore time for Welsh Government to push ahead with the work for the very reason that you outlined in your statement, let alone for safety reasons for the communities living in their shadows?

I also wanted to ask about the arms industry here in Wales, an industry that continues to be supported by the Welsh Government, and an industry that, according to Scientists for Global Responsibility, is one of the key greenhouse gas emitters in the UK, with a carbon footprint that dwarfs that of many of the planet's smaller nations. An obvious question that therefore springs to mind is why the aerospace and defence sector in Wales is continuing to receive both direct and indirect financial support from the Welsh Government, including funding through several enterprise zones that act as hubs for the sector. Can the Minister therefore outline if there are plans to withdraw funding from industries in Wales that are currently part of the problem that we are all trying to tackle as a society, and invest instead in industries that are part of the solution? 

On coal tips, we're not satisfied with the current position with the UK Government, who have thus far refused to meet their obligation in terms of the share of responsibility that is plainly not devolved for coal tips and the reality of the challenge they present, as well as refusing to recognise there is actually an economic opportunity here. The Welsh Government now has to go through its own budget. You and other Members will, of course, be scrutinising us on that over the coming months, but those will be very difficult choices for us. There is always a challenge, is there not, when responsibilities that are plainly not devolved are not undertaken, around whether we make a choice to try to make up for those, as we have done in the past, for example, on broadband, where it is not devolved but the Welsh Government has taken on responsibility for filling in some of the gaps. The reality is this comes with a real cost, and money that we spend in those areas cannot be spent in others. I can honestly tell you that from the start of austerity through now, there have been a great many difficult choices that Ministers have had to make in balancing our responsibilities with the finite budget we have, and coal tips would appear to be one such consideration for the future. 

On your point about areas of advanced manufacturing where some can be used in terms of defence industries, I think that your putting of the question was rather pejorative. I think the people who work in the aerospace industry and others would not welcome the way that it was phrased and put. I think there is a fair point within that about how in this sector we do see decarbonisation take place. Actually, on my visit to the advanced manufacturing centre in north Wales and Airbus, and in my conversations there, they are already thinking now and acting and investing in decarbonising the way that that sector works. I think that shows that there are businesses that recognise they have a stake in decarbonising and in making sure the industry survives, and we have a stake in supporting them in that transition. I hope that perhaps in the future we might have a different conversation and perhaps a less pejorative way of describing what is a real challenge.   

Finally, Tom Giffard. 

Diolch, Dirprwy Lywydd. Minister, whilst we all know we need to do more to transition the Welsh economy into a greener one for the future of our planet, many of my constituents in Port Talbot will have legitimate fears about what that might mean for the future of the steel industry and the surrounding community. I know whilst many other Members have mentioned the steel industry, it's also important to remember that the industry can play a key role in reducing our carbon footprint too through the production of things like wind turbines and greener vehicles. Tata itself has taken steps over the last few years to ensure that its steel production is greener, but nearly all industries will need to go further in years to come if we are to meet our targets. Can I ask what steps you'll take to ensure that the steel industry in Port Talbot remains economically competitive on a global scale and protects the local economy, whilst also ensuring it plays its part in a transition to a greener economy? 

I had the opportunity to visit the steelworks in Port Talbot with the constituency Member who is now in the Chair in this particular session. I've had conversations not just with that company but with the other major steel producers in Wales directly about what they are looking to do, because they recognise that there is an imperative to decarbonise the way that steel is produced. There's a challenge and an opportunity and that's why I keep on talking about a just transition. Because you could decarbonise the way that steel is produced and you could do so in a way that doesn't cost lots of jobs, or you could decarbonise the steel sector and you could see significant loss of employment. But every company is looking at how it looks again at its processes, how it looks at what it sees as unfair competition, which is why I think the point that Jack Sargeant made about the deal between the United States and the European Union is important. When you hear President Biden talk about wanting to do something about dirty steel and steel being dumped, that's something that steelworkers and people who run those steel businesses will recognise, and there's a key challenge there to make sure that we have competition that is on a level basis with a shared ambition to see decarbonisation in that sector but does not allow other steel products that have a higher carbon footprint being used in the sector here as well. Because I recognise that steel is important for the future, not just in how we generate future sources of power, but in construction and a wide range of other areas too. So, I'm very clear that steel must have a significant future in the economy of Wales and the wider UK.

 Thank you, Minister.