Humza Yousaf has insisted that Scotland can “exploit” Europe’s need for renewable hydrogen as he suggested speeding up the decline of the oil gas industry could cause economic harm.

The First Minister was speaking after the Scottish Government’s consultation closed on its draft energy strategy which proposes accelerating the decline of the North Sea oil and gas sector amid the climate crisis.

Speaking at the All-Energy conference at the SEC in Glasgow, the First Minister warned about potentially shutting down the oil and gas sector too quickly.

In his opening speech at the summit, Mr Yousaf acknowledged that “economic change can often bring uncertainties” but insisted Scotland has a "moral imperative” to seek a just transition away from fossil fuels.

He said: “I understand the impact that deindustrialisation had on many parts of Scotland in the 1970s and 1980s, and that impact is still felt by many former mining and steel communities to this very day.

Read more: Yousaf wants UK to be 'willing partner' for Scotland to reach net zero

“So I’m certainly determined that, from the government perspective, from the government that I lead, we will not abandon those in the oil and gas industry now, in the way that I’m afraid UK governments abandoned coalminers and industrial workers in the 70s and 80s.”

The FM added: “There is a reason we call it a just transition. There is nothing just, nothing progressive, about throwing workers on the scrapheap, plunging them and their families potentially into poverty.

“And that’s why the work that a number of our key partners are doing, a number of those in the offshore industry, a number of those in the oil and gas sector, in relation to decarbonising, to ensuring we have the skills to shift from fossil fuels, to of course the green economy, is work that we fully support in its entirety.”

Speaking to journalists after his speech, Mr Yousaf said that he does not think “you should extract any oil if there’s no good reason to do so”.

But he pointed to “meeting our climate change obligations” and “energy security” as considerations.

Read more: SNP ministers urged to commit to fully clean energy system

Mr Yousaf said that the North Sea oil and gas sector “welcomed the approach that I was taking”.

He added that the UK Government, which is responsible for issuing new oil and gas licences should undertake “more robust assessments”, but refused to say that proposed developments like Rosebank should not go ahead.

Mr Yousaf announced his Government will allocate £7 million to 32 different green hydrogen projects to try and kickstart the industry.

The Scottish Government's renewed economic case for independence points to renewable hydrogen as being a key export avenue for an independent Scotland.

The updated prospectus brands renewable hydrogen as potentially “Scotland’s greatest industrial opportunity since oil and gas” amid claims it could create up to 300,000 green jobs – almost double the number working in the NHS in Scotland.

But in a scathing assessment of the Scottish Government’s plans, Professor Jim Skea, the chairman of the government’s own just transition commission, has warned there is no evidence to suggest that Scotland could export the fuel.

Read more: SNP's just transition chief blows hole in independence economic case

He said: “One of the main points we picked up with the draft energy plan was the quite aspirational nature of some of it.

“For example, in relation to hydrogen, the assumption was that a lot of the market might lie in export opportunities and we didn’t see the evidence there for that to justify where these markets were going to be.”

Asked by The Herald over the scepticism, Mr Yousaf insisted that exporting the fuel is “absolutely the ambition”.

He said: “That's why I announced several millions of pounds of funding into those testing innovator projects around hydrogen.

“It's around, of course, the utilisation, the storage, but I would hope in the future, the export of that technology.

“Scotland is seen as being an innovator. I've just come off the EMEC stall which has done phenomenal work over the last 20 years in Orkney, we have been at the forefront of testing some of these technologies, investing in them, showing that they work.

“But I was at a recent meeting in London, meeting with a number of ambassadors across Europe. All of them, bar none, had a huge interest in Scotland's renewable energy sector, partly because of course so much of Europe rightly wants to diversify away from its reliance on Russian gas.

“I think Scotland has a really unique opportunity to exploit that opportunity.”