Grangemouth: Nine options identified for future of industrial complex
A report into the Grangemouth industrial complex has identified nine options to support its long-term future.
First Minister John Swinney and UK energy minister Michael Shanks have said they will leave “no stone unturned” in ensuring a just transition for the site and local community.
The feasibility study, known as Project Willow, has said projects relating to waste, bio-feedstock and hydrogen would all likely attract private investment.
Such moves would create 800 jobs by 2040, it estimated, but would need around £3.5bn of capital investment from the private sector and the development of supply chains.
Shanks and acting net zero secretary Gillian Martin are co-chairing a meeting of the Grangemouth Future Industry Board today to further discuss the proposals.
Swinney is also visiting the site this morning to coincide with the publication of the major report.
He said: “Grangemouth is home to over a century of industrial expertise and employs thousands of highly skilled workers, placing the site at a massive competitive advantage and creating a unique opportunity for investors.
“Everyone working at Grangemouth’s refinery – and in the wider industrial cluster – is a valued employee with skills that are key to Scotland’s economic and net zero future.
“This report sets out a wide range of viable alternatives for the refinery site, demonstrating that a long term, new industrial future at Grangemouth is achievable. We will continue to work closely with the UK Government to realise these opportunities and Scottish Enterprise stands ready to support inward investors looking to progress any of these technologies.”
Both governments have been working to find a sustainable solution for the site’s future after owners Petroineos announced its decision to close the oil refinery.
Over 400 workers are set to be made redundant in the process, with the site transitioning to a fuel imports hub.
It has been seen as one of the first major moments in the UK’s shift to a net zero economy, with fossil fuel jobs disappearing and measures not yet in place to replace them.
Just Transition Commission chair Satwat Rehman has described Grangemouth as a “litmus test” that both governments are “failing”.
The £1.5m study was commissioned by the two governments last year and conducted by consultancy firm EY.
After evaluating over 300 technologies, it has pinpointed nine potential projects under three broad umbrellas as areas for growth.
This includes plastic recycling and biorefining; producing bioethanol and biomethane; and producing hydrogen to replace natural gas, for sustainable aviation fuel, and for shipping and other chemicals.
The report makes a series of recommendations to both UK and Scottish governments, including coordination of initiatives to maximise funding, using government investment to unlock private finance, reforming electricity markets to reduce the cost of renewables, and developing policy to stimulate demand for low-carbon products.
Shanks said: “We will build on Grangemouth’s expertise and industrial heritage to attract investors, secure a long-term clean energy future, and deliver on our Plan for Change.”
Prime Minister Keir Starmer last month confirmed £200m would be made available from the National Wealth Fund to support projects at Grangemouth. It is hoped this will attract up to £600m of private investment.
The Scottish Government has provided £25m via the Grangemouth Just Transition Fund.
Trade union Unite has urged the governments to accelerate efforts to turn the site into a producer of sustainable aviation fuel, believing this to be the best way to save jobs.
It warned the majority of the nine projects would not start for several years under Petroineos, and has said ministers must step in to fast-track them.
Unite general secretary Sharon Graham said: "The UK and Scottish governments need to act rapidly to protect skilled well paid employment. There are projects like SAF production which can be swiftly enacted to protect jobs and those opportunities must not be lost. This would pave the way for the UK to become a world leader in green aviation.”
Fuels Industry UK, which represents the wider sector, said that the jobs would only materialise if the UK offers a "globally competitive operating environment".
It has called for a clear and stable regulatory framework for fuel production, and for the UK Government to address the high cost of energy.
CEO Elizabeth de Jong said: "The UK cannot afford to see another refinery closure. Decisive action is needed now if the UK is to retain a sustainable, competitive, and resilient fuels sector to power our country into the future."
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