Why Grangemouth has new hope after years of stalled talks as workers 'angry' at just transition false promises

Key players drawing up a blueprint to ensure workers are moved to clean jobs as Grangemouth transitions away from fossil fuels are hopeful they have turned a corner after being left “angry” at years of false promises.

The industrial hub on the Forth employs around 2,000 people directly, while thousands more work in supply chains attached to Grangemouth. But change is coming.

Key Grangemouth operators, Ineos and Petroineos, say they are committed to a net zero transition by the middle of the century. Statistics for 2022 show that operations at Grangemouth by Ineos and Petroineos produced at least 2.9Mt of carbon, around 7 per cent of Scotland’s total.

Hopes are rising that a long-term future for the Grangemouth industrial hub can be drawn up (Picture: Lisa Ferguson/National World)

But after years of stalled talks between Scotland’s two governments and fears the multi-national companies have been “out-negotiating” ministers, those involved believe the new Labour government at Westminster could spark the urgent action needed to ensure there is no repeat of the deindustrialisation of the coal industry in the 1980s that left thousands out of work.

The lack of a full just transition plan for Grangemouth was laid bare in November when Petroineos announced that Scotland’s only oil refinery is set to shut next year - with hundreds of jobs at risk.

A vision for Grangemouth includes transforming the site into a green hydrogen hub, renewables base, linking operations up to the carbon capture project in the North East and using infrastructure to ramp up production of sustainable aviation fuel. But those industries are not as job intensive as fossil fuels – meaning a jobs plan is crucial.

Government investment will likely be needed to clean up operations at Grangemouth (Photo by Jane Barlow/PA Wire)

The Scottish Just Transition Commission has published a report on the prospects for Grangemouth and after conversations with workers, found that trust needs to be re-established with the workforce.

The commission asked Dr Ewan Gibbs and Riyoko Shibe from Glasgow University to investigate the impact of the uncertainty on workers.

Dr Gibbs said: “These are workers who, in most cases, expected to experience an energy transition, expected that their skills and their commitment that they have shown to the site at Grangemouth would be reciprocated through planning and investment.

“They are disappointed, angry and also frustrated that that’s not the position that they are in and are facing uncertainty for the future.”

Ineos and Petroineos have operations at the Grangemouth industrial hub (Photo by Michael Gillen/National World)

Co-chair of the commission, Satwat Rehman, added: “The people of Grangemouth have spoken time and again about what’s needed and have not seen any action result from it. That’s what has to stop.”

In one of Keir Starmer’s first commitments after taking the keys to Downing Street, the Prime Minister pledged his government, in co-operation with the Scottish Government, will urgently investigate whether the oil refinery can be saved from closure.

Both governments have pledged £800,000 each for ‘Project Willow’ that will study long-term plans for Grangemouth amid Labour’s commitment for a clean energy power system by 2030.

In a sign both governments are taking the task seriously, UK Energy Secretary Ed Miliband and Acting Scottish Energy Secretary Gillian Martin, will now co-chair the Grangemouth Future Industry Board leadership forum.

Commissioner Richard Hardy, vice president of the STUC, has warned that “we’re almost too late” to draw up a full plan for Grangemouth, insisting “the time for talk is definitely over”.

Mr Hardy said that “the Scottish Government alone can’t fix this”, warning SNP ministers do not have “the financial clout” to do so.

He added: “Until July 4, we didn’t have a government in Westminster that cared less about this change. That’s why this is a real opportunity, that’s why the positivity of the new Prime Minister committing and speaking about better working relationships with the devolved nations is so important.

“For the last 14 years, the last Westminster government has had no interest. So hopefully this is a big opportunity for change.”

But concerns have been raised that companies that operate out of Grangemouth do not have enough pressure from government to take a just transition seriously. Frustration has also been vented over the corporations being able to outfox politicians on the conditions of green funding.

Commissioner Deborah Long, CEO of Scottish Environment Link, said that “the Scottish Government needs to be getting much more skilled at negotiations”.

She added: “What we are looking at here are international companies who out-negotiate the Scottish, and arguably, the UK government.”

The commission has called for Scotland’s top industrial polluters to be compelled to draw up just transition plans to protect jobs in the move to clean energy. Mr Hardy has stressed that a change of mindset is needed to ensure communities and workers benefit from the transition.

He said: “I’ve heard them (Ineos) talk about what they need and they will only do things if they are given money, but that money needs to come with a return.

“I think we’ve got to fundamentally use just transition as a way of making industrial change work for workers and communities instead of just working for international companies.”

Iain Hardie, regional head of legal and external affairs at Petroineos, said: "There is a great opportunity for Grangemouth and the skilled workforce here to be at the vanguard of low-carbon fuels manufacturing, but there are a number of hurdles to overcome and questions to answer before we can map a clear route to that becoming a reality.

“Delivering change will require all stakeholders to work collaboratively to develop complex commercial ecosystems which do not yet exist or are not currently economically viable without legislative or regulatory support.

“As such, we welcome the new 'Project Willow' partnership with our colleagues in the UK and Scottish governments and hope it will enhance our collective understanding of the potential for Grangemouth to play a significant role in developing the low-carbon fuels of the future."