Exclusive:Petroineos poised for tax breaks despite refinery closure
Petroineos is in line for tax breaks at Grangemouth despite public anger over the decision to close Scotland’s only oil refinery at the site, The Scotsman has learned.
Last month, The Scotsman revealed the firm, a joint venture between billionaire Sir Jim Ratcliffe’s Ineos and China's state-backed PetroChina, will close the refinery next year, with the loss of 400 direct jobs and risking thousands more in its supply chains.
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Now SNP deputy first minister and economy secretary, Kate Forbes, has confirmed Petroineos is in line for tax breaks at Grangemouth as part of the green freeport scheme between the Scottish and UK governments - despite fair work practices being a key part of the policy.
Yesterday, the UK and Scottish governments announced a £500,000 project that will see “bespoke support” offered by Forth Valley College to help workers build on current skills and develop new ones to help them find new work in the green energy sector.
But Labour Scottish Secretary Ian Murray admitted there can be no guarantee of a new job for every worker who could be laid off when the Grangemouth refinery closes next year.
The fresh concerns have emerged after it was revealed Petroineos could earn around £6m from the sale of hundreds of thousands of free pollution permits from the UK government over the refinery closure - while the company is in line to benefit from a share of £25m of seed funding capital from Scotland’s two governments as part of the Forth freeport business case.
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Hide AdMs Forbes has now admitted that “an area of land owned by Petroineos” is included in the zone designated for tax incentives under the Forth freeport.
She added: “This area is not involved in the current fossil-fuel refining operations, and is designated for bio-refining and low carbon fuels manufacturing.”


The economy secretary added that the freeport proposals are “focused on the transition to net zero, and supporting that transition through targeted seed capital funding”.
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Hide AdShe added: “The Scottish Government has worked in partnership with the UK government to ensure that specific provisions on just transition, fair work and the real living wage are critical parts of green freeport monitoring and evaluation.”
Read more: Petroineos blamed by SNP minister over 'earlier' Grangemouth closure decision as 400 jobs to be axed
Scottish Labour MSP Richard Leonard warned that Petroineos has “in the past, secured £90m of public money” from Holyrood “and has benefited from a £300m underwriting by the UK government”.


He added: “It is a company that is now seeking more money—seed capital—through the freeport initiative for land preparation at its Grangemouth site.
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Hide Ad“Where we have a corporation that is preparing to steal these workers’ jobs with one hand while reaching out to grab public money with the other, it is about time that we started using the leverage that we have.
“It is about time that we started standing up to PetroChina, Ineos and the other oil multinationals, and it is about time that we started holding to account the Jim Ratcliffes of this world.”


Scottish Greens MSP Gillian Mackay, said: “To hear last week that Ineos are teed up to pocket an extra £6m profit from the refinery closure, and now it is confirmed they are also in line for further tax breaks on the site is utterly repugnant.
“This is a huge blow to the workers who are facing an uncertain future while their current employer gets another benefit.
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Hide Ad“There may be government support offered to help workers find employment, but Ineos claims it’s ‘business as usual’ after the transition of the Grangemouth site takes place. How can it be ‘business as usual’ without the same workforce who turn their blood, sweat and tears into profits?”
A spokesman for Petroineos said: “Grangemouth is ideally placed to become a hub of low-carbon manufacturing but there are real regulatory, fiscal and economic barriers to unlocking the massive capital investment required to realise this.
“That is why we welcome the UK and Scottish governments’ commitment to undertake a joint study – project willow - to rapidly explore the full range of low-carbon options that could be developed at Grangemouth.”
The Scottish Secretary yesterday stressed that Scotland’s two governments could not provide an assurance everyone would be employed ahead of the refinery closure.
Mr Murray said: “Government can’t give that guarantee.
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“What we are trying to do is put the conditions in place to make sure all the opportunities are open.”
He added: “That’s what government can do, and we need to make sure we minimise the number of jobs that are, indeed, lost.”
Both Governments will “put everything, all the building blocks” in place to minimise the numbers that will be out of work come the closure of the refinery – which will be turned into an import terminal and retain about 100 jobs.
Mr Murray also quashed any suggestion the site could be nationalised, insisting “it is not possible for the government to run a refinery as massively loss-making as it is”.
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Hide AdSNP acting energy secretary Gillian Martin said jobs guarantees were “decisions that are made at a commercial level for private firms as to who they employ”.


She added: “But what I would say to anyone that’s wanting to invest in Grangemouth is that the workers at the Grangemouth refinery are some of the most highly-skilled workers in the whole of Scotland.”
UK energy secretary Ed Miliband, who was visiting Scotland yesterday, said his government will “continue to stand with Grangemouth workers and we are putting money on the table to secure workers good onward employment”.


He added: “By working in partnership with the Scottish Government, we’ve unlocked an unprecedented joint investment plan to support workers and secure Grangemouth’s future, and I will continue to spare no effort to drive this work forward.”
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Hide AdAsked on a visit to Aberdeen whether he has been ignoring the North Sea oil and gas sector, Mr Miliband said: “Absolutely not. I’m delighted to be here talking about how GB Energy, a new publicly owned energy company, is going to be headquartered here in Aberdeen.
“It is a vote of confidence in the workforce here, a vote of confidence in businesses here and it is a sign of our determination that Aberdeen is not just the clean energy capital of the UK but of the whole of Europe.”
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