Grangemouth rescue plan needs £3.5bn to create up to 1,100 jobs by 2040

The Grangemouth rescue plan needs £3.5bn worth of private investment, according to a landmark study published on Wednesday.

Project Willow looked at 300 potential projects that could protect the future of Scotland’s largest industrial site, identifying nine that were “credible”.

No matter which projects are taken forward, the rescue operation will require substantial capital investment from the private sector – somewhere in the region of £3.5bn.

The UK Government is offering £200m and the Scottish Government is backing it with £25m.

However, the plans would only create about 1,100 jobs – around half the number of posts at risk from the closure of the refinery.

In addition, the most job-intensive projects would not come online until the mid-2030s.

The latest report comes months after the refinery, operated by Petroineos, announced its closure and plans to convert into a fuel import and export terminal.

Petroineos claimed the changes were due to a continuing decline in profitability and the need for substantial new investment to keep the refinery running.

In response, the UK and Scottish Governments have been working with Petroineos and its shareholders to ensure a long-term future for the site.

The Project Willow feasibility report provides nine “credible” proposals likely to attract private investment, including plastics recycling, hydrogen production and other projects that could create up to 1,090 jobs by 2040.

The UK and Scottish governments say efforts will now focus on identifying partners and investors who, in collaboration, can bring these projects to life.

To kickstart the process, UK energy minister Michael Shanks and acting Scottish cabinet secretary for net zero and energy Gillian Martin are co-chairing a meeting of the Grangemouth Future Industry Board with local industry leaders, Falkirk Council, trade bodies and unions on Wednesday morning.

Scottish Enterprise and the UK Government’s office for investment have also promised to work with Petroineos to market the proposals set out in Project Willow and seek investor interest.

Scottish secretary Ian Murray said the report on Wednesday marks a “significant milestone” in the commitment to ensure the sustainable future of the Grangemouth site, which he said benefits the local community and the Scottish economy.

“Working alongside the Scottish Government and local partners, we remain committed to supporting the skilled workforce at Grangemouth, and are already working to attract investors for the projects outlined in this report,” Murray said.

Ian Murray said he is 'hopeful' jobs will return to Grangemouth — Ian Murray said he is ‘hopeful’ jobs will return to Grangemouth STV News

First Minister John Swinney also reiterated Holyrood’s commitment to Grangemouth and said that everyone working at the refinery – and in the wider industrial cluster – is a “valued employee with skills that are key to Scotland’s economic and net zero future.

“Grangemouth is home to over a century of industrial expertise and employs thousands of highly skilled workers, placing the site at a massive competitive advantage and creating a unique opportunity for investors,” Swinney said.

“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.”

The energy minister also committed to leaving “no stone unturned” in supporting the industrial future for Grangemouth, delivering jobs, and economic growth.

“This report and the £200m investment by the UK Government demonstrates that commitment,” Shanks said.

“We will build on Grangemouth’s expertise and industrial heritage to attract investors, secure a long-term clean energy future, and deliver on our Plan for Change.”

Iain Hardie, regional head of legal and external affairs at Petroineos, which operates Grangemouth refinery and conceived Project Willow, said: “The publication of the first Project Willow report is a milestone event for Grangemouth that 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.

“We look forward to continuing to support both UK and Scottish Governments as they implement the recommended policy, regulatory and fiscal changes required to unlock the opportunities identified in our report.”