UK Prime Minister Sir Keir Starmer has announced a further £200 million investment in the Grangemouth industrial site, where Scotland’s only oil refinery is expected to close later this year.
Refinery owner Petroineos announced the closure of the facility last year amid plans to transition the site into a fuel import terminal, leading to the loss of more than 400 jobs.
Sir Keir announced the funding, which will come from the newly created National Wealth Fund, at the Scottish Labour conference in Glasgow on Sunday.
Addressing the conference, Sir Keir said the Grangemouth site presented a “huge opportunity for renewal”, with potential for future uses in biofuels or hydrogen energy.
“We will grasp the opportunities at Grangemouth, work alongside partners to develop viable proposals, team up with business to get new industries off the ground,” he said.
© Peter Byrne/PA Wire“And to attract private investors into the partnership we need, we will allocate £200m from the National Wealth Fund, for investment in Grangemouth, investment in Scotland’s industrial future.”
The Prime Minister said every worker made redundant at the site would get 18 months full pay, alongside a £10m skills and training programme.
Businesses that take on Grangemouth workers will also be in line for national insurance relief, Sir Keir said.
It comes after Scotland’s First Minister John Swinney separately announced £25m in extra funding for Grangemouth last week.
The UK and Scottish governments had previously committed £100m to the Falkirk and Grangemouth Growth Deal to support jobs and skills in the area along with a report – called Project Willow – to look at the future of the site.
Grangemouth future
Speaking to BBC Radio Scotland’s Good Morning Scotland programme on Monday, Scottish Labour leader Anas Sarwar said work must proceed “at pace” to attract investors.
Sarwar said the £200m funding is “not to be sniffed at”, and could lead to investment in areas such as hydrogen, synthetic fuels and sustainable aviation fuel (SAF) production.
“It’s £200m of National Wealth Fund money, which, as I say, is meant to attract multipliers in terms of investment from private sector money,” he said.
© Andrew Milligan/PA Wire“But I think it all depends on the projects that come forward. And I think if we can make, as I say, one of the three examples I’ve mentioned, I think there’s four or five other things that project willow is looking at.
“All of them I think would secure a positive future for the site of Grangemouth. But what we require now is to move at pace and attract that investment.”
‘Huge investment opportunity’, Sarwar says
Sarwar said the Grangemouth site is a “huge investment opportunity” due to its strategic location, grid connections and existing port infrastructure.
But he criticised the “intransigence” from the site’s owner Petroineos, a joint venture between PetroChina and Ineos, when asked whether Labour could prevent job losses.
In response, Petroineos regional head of legal and external affairs Iain Hardie told the PA News Agency that the company warned politicians and officials “repeatedly” of the looming closure “for several years”.
“This included detailed briefings to Mr Sarwar and members of his team,” Hardie said.
“It will always be a matter of regret that neither Scottish nor UK governments were moved to action until last summer, but what did happen is that Petroineos conceived project willow, to identify opportunities for low-carbon manufacturing that could secure a bright future for Grangemouth.
“The financial commitments made by the current governments at Holyrood and Westminster this past week are hugely encouraging but that money can only be deployed to good effect if complemented by policy and regulatory interventions that will make these technologies investable.”
Government has ‘finally listened’, union says
Trade unions have criticised the site’s closure and accused both the Scottish and UK governments of not doing enough to ensure a just transition for workers.
But following the announcement, the Unite union said it welcomed the funding announcement for Grangemouth, although it cautioned the “devil will be in the detail”.
Unite general secretary Sharon Graham said: “This is welcome news after months of our campaign and supported by the community of Grangemouth, Keir Starmer and the UK government have finally listened. This needs to be the start not the end in delivering a real workers’ transition for Grangemouth.’
© Andrew Milligan/PA Wire“Following this announcement, it is essential that all stakeholders come together to put the meat on the bones and that this investment counts for jobs and our security. Clear timescales will be important as well as details on jobs.”
Unite has previously outlined a plan to produce sustainable aviation fuel (SAF) and the union says the Grangemouth refinery is “essential to the success of the Scottish economy”.
SNP First Minister John Swinney also welcomed the funding announcement, calling it a “step in the right direction”.
“Everyone working at Grangemouth’s refinery is a valued employee with skills that are key to Scotland’s net zero future,” he said.
“We will continue to work constructively with the UK government to secure the site’s future.”
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