Burned: Grangemouth workers are falling through the gap between rhetoric and action

Until you visit Grangemouth, it’s difficult to truly get the sheer scale and impact of the industrial cluster – both physically and on the town’s psyche.

The Petroineos complex, home to Scotland’s only oil refinery among other assets, is equal in size to the town itself. It’s not long before the high street gives way to the towering chimney stacks, cooling towers and blocky industrial offices. Add to that the fact the town is surrounded on all sides by variously the M9, the Forth port, or the smaller West Mains industrial estate, it’s clear why, as local Kathleen McIntosh puts it, it feels as though “industry’s encroached into the town”.

No wonder that Grangemouth the town has become synonymous with Grangemouth the petrochemical site. Or as another resident, Cliff Bowen, describes: “Grangemouth is oil and gas, and oil and gas is Grangemouth. Without it, what does this area look like?”

There are few locals without some connection with the site, whether that’s direct employment, in the wider supply chain or as part of the service industry which came to the town because of it. When Petroineos announced last November it would close the refinery, job losses were estimated at 400. In reality, the number of jobs at risk is far higher.

It will be absolutely heartbreaking the day [the refinery] gets switched off

Bowen, who is also an executive council member for trade union Unite, adds: “You can get to anyone in this town in two moves from the refinery or the chemical plant or the FPS [Forties Pipeline Systems] part of the business. Everybody’s got a link to that workplace. It will be absolutely heartbreaking the day [the refinery] gets switched off and the lights go out, and they start to tear it down.”

In the months since the initial announcement, the Grangemouth Future Industry Board (GFIB) has been meeting regularly to find a way through. Though originally set up in 2020, until the start of this year GFIB was largely a talking shop for the Scottish Government and its agencies, with a little input from Falkirk Council. But the announcement that the closure of the refinery was imminent brought urgency, and GFIB now includes UK ministers, Petroineos, other industry representatives, and trade unions. There had been some hope that the refinery could be saved.

The general election result generated fresh optimism. Grangemouth was one of the first topics discussed by Keir Starmer and John Swinney when the pair met up days after the change of UK government. Insiders at Petroineos tell Holyrood there was a marked improvement in government relations.

But it was not enough to change the financial logic behind the decision. In early September, the company confirmed the refinery would close in the second quarter of next year. Grangemouth will become home to an import terminal, taking deliveries of refined oil moved by tanker from Amsterdam, Rotterdam and Antwerp. Consultation has begun with the refinery’s 475-strong workforce to set out next steps and settle on redundancy terms. Only a fifth the workforce will be needed at the import terminal, and those remaining jobs will not be specialist manufacturing roles.

^{Credit: Google Earth}

“The energy transition is happening now, and it is happening here,” said Frank Demay, chief executive of Petroineos Refining, in the press release confirming the news. “Demand for key fuels we produce at Grangemouth has already started to decline and, with a ban on new petrol and diesel cars due to come into force within the next decade, we foresee that the market for those fuels will shrink further. That reality, aligned with the cost of maintaining a refinery built half a century ago, means we are exploring ways to adapt our business.”

The UK and Scottish governments issued a joint response to the announcement within the hour. UK energy secretary Ed Miliband said the news was “deeply disappointing”, while Scottish net zero secretary Gillian Martin said both governments had “continued to press the shareholders for a positive decision until the eleventh hour”.

An investment plan to “secure Grangemouth’s industrial future and protect its skilled workforce” was confirmed, though only £20m of the £100m total is new money – the rest is from the already-announced Falkirk and Grangemouth Growth Deal. The governments also highlighted £1.5m investment in Project Willow, a study into long-term options for Grangemouth’s future being taken forward with Petroineos and consultancy firm EY.

Ministers have continued to urge the company to keep the refinery open for as long as possible, but under current plans up to 250 staff will see their job disappear within three months of it shutting next spring. Around 100 will be kept on for between six and 12 months for decommissioning purposes, and 20 will be retained for slightly longer for the demolition process (though that will largely be carried out by specialist contractors).

Where the hell are the politicians? Where are the promises that were made?

Other options have been floated. New Labour MP for Grangemouth and Alloa, Brian Leishman, has called for it to be brought into public hands. And the SNP MSP Michelle Thomson, whose Falkirk East constituency covers the area, caused a stir on the day of the announcement when she revealed during First Minister’s Questions she had been contacted by a potential buyer.

“I got as far as introducing the potential buyer to the right people and allowing the right conversations to take place. I won’t have any further involvement in the matter,” she told Holyrood earlier this month.

But neither a buyout nor nationalisation seem likely, and while government investment for the long-term future of Grangemouth may be welcome, it does little to alleviate immediate concerns.

“The impact will be felt for generations to come,” says Bowen, who works at Grangemouth himself, though not at the refinery. He says the initial “shock” of the announcement is now starting to wear off, and the public mood is “turning to anger”. “Where the hell are the politicians? Where are the promises that were made? Labour promised during the election campaign they would save Grangemouth. So where are those promises? They’ve turned into nothing. They’ve turned into empty, vacuous statements.”

It sends a warning signal to workers beyond Grangemouth too, he argues. The decision here is just the first of many that will need to be taken across the country in the coming decade as the country moves to net zero. It’s a clear example of why a just transition is needed – and how much of a gap there still is between the political rhetoric and action.

“At the very first hurdle of just transition, the UK Government and Scottish Government have both abandoned those refinery workers,” Bowen says. “The workers have been abandoned on the altar of net zero at the very first opportunity that both governments have to come in and do something there.

“We were never asking for the refinery to stay open for another five to 10 years. Everybody knew the way the refinery was going, but what we did ask for was a couple of years, two or three years to look at what is the art of the possible here. What is the art of the possible for these workers, whether it’s sustainable aviation fuel to be produced at the site, whether it’s biofuels, whatever it was. Give us two to three years so we can get studies done, get spades in the ground, get these new green technologies up and running, and these workers can transfer from that refinery into these new plants. That was all we asked for.”

To make matters worse, the Scottish Government recently announced it would not be publishing its just transition plan for Grangemouth until next spring, a year later than anticipated. It is the latest in a series of delays in this area more broadly, alongside the overarching energy strategy and just transition plan, sectoral and region-specific plans, and the climate change update.

We tried to get Willow started about five years ago, got nowhere with the government

One insider at Petroineos says this is “a pretty big gap left by government”. The lack of an industrial strategy or even any serious engagement from ministers of either government until last November meant the company had to make the decision it did, and Project Willow will “try and fill that gap as best we can”, he said.

“We will not deliver an answer in time to allow those jobs to be transferred seamlessly. Willow was never designed to do that. We tried to get Willow started about five years ago, got nowhere with the government, Scottish or UK, and it took a crisis to get them interested. That would have been the way that you would have avoided, potentially, the job losses.”

The next stage of Project Willow is a feasibility study into three possible futures for the site: hydrogen, clean e-fuels, or sustainable aviation fuels. The company believes building a biofuels refinery is not yet commercially or economically viable, but Willow will look at the wider context, for example in relation to skills and education, the impact on the community, and the impact on the environment. The outcomes of the study will be published by next spring and government involvement in the project means ministers “can’t dodge the questions”, says the source.

But even if that study concludes those options can be taken forward, that won’t happen until 2028 at the earliest. That lag between now and then is not just a Willow problem. The UK Government earlier this month announced a £22bn investment in carbon capture and storage projects which will create an estimated 4,000 jobs at two sites in the north of England, but again those sites won’t be operational for four years. It also did not mention the Acorn project in the north east of Scotland, which will have to wait even longer for any new roles to be created.

Meanwhile, there is still confusion about the new publicly-owned energy company, GB Energy. Though we now know it will be headquartered in Aberdeen, no one knows how many people it will employ, and while Miliband has said one of the purposes will be to “create the next generation of good jobs”, there is little clarity on what those jobs are, where they will be, and when they will be created.

With the UK Government banning new oil and gas licenses, and question marks over the futures of oil fields like Rosebank and Jackdaw, there is a feeling among the sector that it is being wound down too fast, while support for new technologies and industries is not coming fast enough.

Bowen believes the uncertainty will put off investment in the country’s energy transition because many of the firms involved in oil and gas are the same firms that will help to deliver net zero. “GB Energy is going to rely on investment from the sector. Once the sector goes, who’s going to fill that hole?” he asks.

As with Grangemouth, this all raises the question of how to prevent skills loss. Bowen reveals that following the announcement late last year, several colleagues were contacted by companies wanting their skills – and many of them were based abroad.

We said this was going to be a litmus test for just transition, and at the moment we’re failing it

“The truth of the matter is, if you want to decarbonise energy in this country and move towards these greener energies, you’re going to need these oil and gas workers’ skills to do that,” he argues. That’s why he has repeatedly called for a “homegrown energy transition” encompassing an overarching plan which sets a clear direction of travel. That will give companies confidence that they will get a return on their investment, as well as improve trust among workers that there will continue to be jobs for them.

A similar call has been made by government advisory body, the Just Transition Commission. In a paper published over the summer on Grangemouth, the Commission said efforts to build trust in the local community had “fallen short” and therefore the Scottish Government’s just transition plan for Grangemouth must include “clear, measurable and enforceable actions”. “The value of the plan will depend on the level of assurance and security it provides to workers whose livelihoods are on the line, as well as to the local community in Grangemouth,” it added.

That equally applies to communities across the country which are reliant on these sectors. It calls for just transition plans to be in place for the areas containing the “top 20 industrial emission sites”, which will also “show how the social dimension of transition will be managed”.

But the Commission is clear this is no small task, partly because of the number of stakeholders involved. The report continues: “Five years of policymaking on this agenda has not developed sufficiently to require high carbon emitters to deliver a just transition as standard practice. As we stated in our annual report: the current path will not deliver.

“The limitations of collective efforts to date are nowhere more clearly in evidence than at Grangemouth, which presents an acute challenge for applying a just transition approach, given the central role of a privately owned company and foreign state-owned enterprise, and the associated difficulties in setting conditions and implementing effective mechanisms for open dialogue about the site’s future.”

As co-chair of the Commission Satwat Rehman, speaking at Holyrood’s Climate Action Summit, neatly summarised: “We said [Grangemouth] was going to be a litmus test for just transition, and at the moment we’re failing it. One of the questions we get asked a lot is: do we believe that we can have a just transition to net zero? […] The only answer I can give to that hand on heart is: we won’t if we don’t try. It may not be perfect, but we need to make it work the best we can.”