The Department for Energy Security and Net Zero (DESNZ) has released the results of a feasibility study exploring options for the industrial future of the Grangemouth oil refinery.
The feasibility study, published by consultancy EY, lays out nine options for the site’s future. It cost £1.5 million to commission and follows a recent decision by the site’s owner, Petroneois, to decommission the oil refinery.
The report lays out nine possible proposals for the future industrial use of the site, selected as the most likely to attract private investment into the Grangemouth project. The nine projects include several proposals for waste recycling, such as breaking down hard-to-recycle plastics via hydrothermal upcycling, ABE biorefining, and chemical plastics recycling.
Several other proposals seek to take advantage of Scotland’s strong offshore wind sector by using low-carbon hydrogen. One proposal suggests using wind energy to create low carbon hydrogen to replace natural gas, while another suggests using low-carbon hydrogen on the site to produce methanol and convert it to sustainable aviation fuel, while a third proposal suggests producing low-carbon ammonia from hydrogen for shipping and chemical sectors.
The third category of proposals suggest using the site to create bio-feedstocks, including breaking down Scottish timber into bioethanol, setting up anaerobic digestion facilities, and converting Scottish cover crops into sustainable aviation fuel and renewable diesel using low-carbon hydrogen.
Any industrial future of the site seeks to create jobs, with as many as 800 new jobs forecast to be created by 2040, as well as building on the industrial history of the area and the skills built up in the local population over the years the refinery has been operational. Energy minister Michael Shanks has stated that the UK and Scottish governments are committed to delivering a strong industrial future for Grangemouth, adding that they are dedicated to “leaving no stone unturned” in their mission.
Since it was announced that the Grangemouth site would be decommissioned, the UK and Scottish governments have pledged to work together to secure an industrial future for the site. The Grangemouth refinery is expected to be decommissioned in the second quarter of this year, putting the vast majority of its 475-strong workforce at risk of redundancy.
Funding the future
While the feasibility study seeks to attract private investment in the Grangemouth redevelopment, known as Project Willow, the British and Scottish governments have already committed significant funding to the site’s redevelopment as part of the government’s Plan For Change.
Last month, British Prime Minster Kier Starmer announced a £200 million funding package to unlock the full potential of the Grangemouth site, with Scottish First Minister John Swinney also announcing that a £25 million Grangemouth Just Transition Fund will be established to support businesses to bring forward investible propositions for the site over the next 12 months.
Furthermore, a £100 million Falkirk and Grangemouth Growth Deal package, delivered jointly by the Scottish government and UK government, has been announced, which will invest in local energy projects to create growth in the region and support the reskilling of workers in the local community.
The Scottish government has also said it will work together with DESNZ to deliver tailored skills support for former Grangemouth refinery workers, including the guarantee that any Grangemouth refinery staff member who would like to have skills training at a local college is supported with funding from the UK government, helping local workers into new, good jobs with local employers.
First Minister John Swinney said: “Everyone working at Grangemouth’s refinery – and in the wider industrial cluster – is a valued employee with skills that are key to Scotland’s economic and net zero future.
This report sets out a wide range of viable alternatives for the refinery site, demonstrating that a long term, new industrial future at Grangemouth is achievable. We will continue to work closely with the UK government to realise these opportunities and Scottish Enterprise stands ready to support inward investors looking to progress any of these technologies.”
