The closure of the Grangemouth oil refinery, located on the south bank of the Firth of Forth, in the central belt of Scotland, has become central in discussions about how the government can deliver a just transition away from oil and gas.
It is the nation’s oldest oil refinery, having begun operations in 1924, but its days are numbered as its owner, Petroineos, announced last year that it would decommission the plant from the second quarter of 2025.
While a plan is underway to ensure that the hundreds of workers set to be impacted by the closure of Grangemouth are as protected as possible, these efforts are not without their critics, and it seems that everyone involved has a different view on what a just transition really looks like. But what can future oil and gas decommissioning projects learn from Grangemouth?
Project Willow and the future of Grangemouth
Last week, the Department for Energy Security and Net Zero (DESNZ) released the results of Project Willow, a £1.5 million feasibility study published by consultancy EY, which lays out nine options for the future industrial uses of the Grangemouth site.
These uses include several proposals for waste recycling, such as breaking down hard-to-recycle plastics via hydrothermal upcycling, ABE biorefining, and chemical plastics recycling, proposals to use the site to create bio-feedstocks, and three proposals to utilise or create low carbon hydrogen for a number of purposes, including the creation of sustainable aviation fuel.
In order to deliver this transition, British prime minster Keir Starmer has unveiled a £200 million funding pool to support a green future at Grangemouth site, while Scottish First Minister John Swinney also announced that a £25 million Grangemouth Just Transition Fund will be established to help businesses bring forward investable propositions for the site. Additionally, the Scottish and UK governments will jointly deliver a £100 million Falkirk and Grangemouth Growth Deal package to invest in local energy projects.
There is power in the union
The Grangemouth refinery currently employs hundreds of workers, and the plans laid out in Project Willow suggest that hundreds of jobs could be created at the site as it transitions to a green industrial future.
However, cross-sector trade union Unite, which represents many workers in the oil industry, notes that there will be a gap of several years between the loss of current jobs and the creation of new ones, risking the livelihoods of an entire community in the meantime.
Unite has blasted Project Willow as “a fig leaf to justify its act of industrial vandalism of shutting the refinery and axing jobs”, with Unite general secretary Sharon Graham stating that the feasibility study asked the wrong questions and then failed to deliver necessary answers for the future of the project.
Unite suggests that the production of sustainable aviation fuel is the best solution to balance the necessary act of closing the refinery and ensuring a secure future for those who work at the plant. The union has created a detailed plan for converting Grangemouth into a sustainable aviation fuel facility, stating that this plan could be fast-tracked and implemented almost immediately in order to safeguard current jobs at the plant.
Unite’s proposals suggest that the site could begin by co-processing – that is, by mixing sustainable aviation fuel and petroleum – before gradually transitioning to becoming a full bio-fuels outlet. This plan, as well as securing employment for current refinery workers, is also consistent with the UK government’s aim to develop sustainable aviation fuel, and it is around 30-70% cheaper than developing a new sustainable aviation fuel facility from scratch.
To its credit, the government appears to be taking the views of trade unions seriously as part of its commitment to a just transition. On 19 March, senior officials from Unite and fellow trade unions GMB and Prospect appeared before the Scottish Affairs Committee in the House of Commons to discuss the future of the energy transition for North Sea oil and gas workers.
In this discussion, Unite’s Scotland regional secretary Derek Thompson called for the government to be “bolder in their approach to creating a just transition”, adding that while the £200 million commitment made was welcome, the government should step in to support industry, business and workers by becoming an investor in transition projects when needed.
Lessons to be learned
In that same House of Commons meeting, Ian Perth, Prospect’s negotiations officer for Scotland and Northern Ireland, gave an example of one more positive example of a decarbonisation project that worked more closely to the aims of a just transition than Grangemouth has done thus far.
The Longannet power station, located in Fife, Scotland, was the last coal-fired power station in Scotland. Owned by ScottishPower, the site was decommissioned in March 2016. Perth said that while the closure of the plant was “devastating” for people involved, the decommissioning process was conducted in a very orderly way over a number of years, with workers having a choice of being retrained by ScottishPower, being reallocated to another job within the company, or taking an appropriate redundancy package. In contrast, Thompson added that the news of the closure of Grangemouth “came out of the blue,” adding that “the handling of it has left a lot to be desired by the UK and Scottish governments”.
We can look beyond the UK for lessons to be learned about how we can deliver a just transition, too. A report from the Stockholm Environment Institute (SEI) examined how Denmark, Norway and the UK are approaching the phaseout of oil and gas production in the North Sea to understand how best to approach this issue.
All three case studies identified government as the force with the greatest responsibility for delivering a just transition, adding that “new modes of governance are required that […] promote dialogue with all affected stakeholders”.
Reskilling was also identified as a key part of delivering the just transition in the North Sea, and this is something that UK was praised for its efforts in working to deliver. The UK has developed a new “skills passport” to help oil and gas workers identify transferrable skills in their training to help them move into jobs in green energy.
Specifically for the Grangemouth site, the Scottish government has committed to collaborating with DESNZ to create tailored skills support for former refinery workers. A significant part of this is a guarantee that any Grangemouth refinery staff member who would like to receive skills training at a local college will be supported with funding from the UK government to do so in the wake of the refinery’s closure.
