Grangemouth's Future Hangs on £3.5 Billion Transformation Plan

Grangemouth, Scotland  – The future of Grangemouth, Scotland's only oil refinery, hangs in the balance as a new report reveals nine potential pathways to transform the soon-to-be-closed petrochemical plant into a thriving renewables hub. However, this ambitious plan comes with a hefty £3.5 billion price tag, raising concerns about its feasibility.

The "Project Willow" report, jointly funded by UK and Scottish government ministers, outlines options to revitalize the site, which is set to close by the second half of 2025, resulting in the loss of 400 jobs. The proposed transformation aims to create 800 new jobs over the next 15 years, doubling the number currently at risk.

The nine options presented in the report include:

• Plastic Recycling Plant: Converting the refinery into a facility focused on advanced plastic recycling.
• Bioethanol Production: Transforming wood into bioethanol, a sustainable fuel.
• Hydrogen Production Site: Establishing a hub for green hydrogen production.
• Sustainable Aviation Fuel (SAF) Production: Two options focusing on the production of SAF.
• E-Ammonia Production: Utilizing renewable energy to produce ammonia.
• Biorefining: Processing carbohydrate-rich materials into valuable products.
• Biomethane Production: Generating biomethane from organic waste.

First Minister John Swinney, during a visit to Celtic Renewables near Grangemouth, expressed confidence in attracting private investment to meet the £3.5 billion target. "Yes, because there's private investment that wants to make commitments to the journey to net zero," he stated.

However, the report, authored by consultancy giant EY, acknowledges the "challenges" associated with this transformation. It highlights that low-carbon fuels and chemicals are currently more expensive to produce than fossil alternatives, necessitating substantial private sector investment and the development of new supply chains.

Unions, such as Unite, are particularly advocating for the sustainable aviation fuel (SAF) option, arguing that the plant could be converted relatively easily. The report suggests SAF operations could commence by 2035, requiring a capital expenditure of up to £2.1 billion.

Derek Thomson, the Scotland regional secretary at Unite, urged the UK Government to prioritize the SAF project, emphasizing its potential to save Grangemouth and contribute to the UK's SAF mandates.

UK energy minister Michael Shanks reiterated the government's commitment to supporting an industrial future for Grangemouth, citing the report and the UK government’s £200 million investment.

Petroineos, the refinery's owners, welcomed the report, stating that it "could mark the beginning of a transformation for the whole cluster and, in time, create many more jobs and growth opportunities across a variety of related industries in Scotland."

The future of Grangemouth now hinges on the ability to attract the necessary private investment and overcome the challenges of transitioning to a low-carbon economy. The coming months will be crucial in determining whether this ambitious plan can become a reality.