The next item of business is a statement by Kate Forbes on project willow—unlocking Grangemouth’s potential. The Deputy First Minister will take questions at the end of her statement, so there should be no interventions or interruptions.
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Members will be aware that, despite the Government’s best efforts, Petroineos took the decision to close the Grangemouth refinery this year. We remain disappointed by that decision, which will result in the loss of hundreds of highly skilled jobs at Grangemouth, and our thoughts remain with the workers, their families and the community at this difficult time.
Last month marked an important milestone in Grangemouth’s future, with the publication of the project willow report, which sets out how the skills, expertise and facilities at Grangemouth can be used to achieve a just transition for the site. That study was jointly funded by the Scottish and United Kingdom Governments, and the public information document sets out the study’s findings and recommendations. It demonstrates that a transformative future for the existing site is achievable if the public and private sectors work together in the coming months and years. The study has identified nine projects that are viable alternatives to existing fossil-based operations. If brought to fruition, those projects could support 800 direct jobs at Grangemouth, along with others across the supply chain.
To achieve that transformation for the site, significant investment will be needed to bring those projects to life. Project willow reports that up to £4.25 billion in capital investment will be required in a “base case” scenario. We acknowledge that the public sector has a role to play in leveraging private sector investment in those projects, which is why the Scottish Government will establish a £25 million just transition fund for Grangemouth. The fund will seek to catalyse near-term opportunities arising from project willow and will send a clear signal that we will work with businesses to ensure that low-carbon projects at Grangemouth are market investable.
I welcome the UK Government’s confirmation that £200 million has been ring fenced within the national wealth fund to support the deployment of projects at Grangemouth. However, many of the proposals outlined in project willow are not yet market investable, which may preclude access to national wealth fund support. I therefore call on UK ministers to provide urgent clarity and confirm that those moneys will be available for Grangemouth as soon as businesses need them.
Project willow cannot and will not become a report that merely sits on a shelf. It is a call to action for the public and private sectors to work together to harness the potential at Grangemouth, and I assure members that project willow is being progressed. The Cabinet Secretary for Energy and Net Zero and the UK Government Secretary of State for Energy Security and Net Zero have instructed Scottish Enterprise and the UK Office for Investment to jointly establish an investment task force that will identify and attract investors to support the development of the proposals set out in project willow. The task force will report jointly to both Scottish and UK ministers on a six-weekly basis to ensure that progress is being made to support business, the workforce and the community. I can confirm that initial interest has already been strong, with both Scottish Enterprise and Petroineos confirming that they have received numerous expressions of interest.
Although project willow considered the future of the existing refinery site, we are ambitious about the wider cluster’s low-carbon and renewables prospects. Therefore, the task force will also seek to attract investment in proposals not identified under project willow, ensuring that prosperity is felt in all corners of the industrial cluster.
It is clear from my discussions with businesses that there is a need for a radical shift in the policy and regulatory landscape if new projects are to be deployed at Grangemouth. That is reinforced by project willow, which makes a series of policy recommendations to Government, with the majority being directed at UK ministers due to the reserved nature of these matters.
Officials will work collaboratively with the UK Cabinet Office to ensure that each and every recommended policy change that is required at a UK level is given due consideration. We need UK ministers to take seriously the significant shift in existing policy that will be required to deploy longer-term technologies such as biofuels refining in Scotland. I therefore call on the UK Government to take urgent action to ensure that there is a viable route forward for the production of transition fuels, such as sustainable aviation fuel, at Grangemouth. That includes legislating before the summer to allow revenue mechanisms to be established.
Furthermore, the much-delayed and long-awaited decision by the UK Government on the Acorn project is essential for the future of the Grangemouth industrial cluster. The lack of clarity and commitment from the UK Government is inhibiting, and will continue to inhibit, investment. I therefore call on the UK Government to show that it is serious about supporting Grangemouth’s transition and confirm Acorn now.
As I have set out, we have already heard from businesses and potential investors with an interest in supporting new activities at Grangemouth. Now that project willow has been established, our commitment is to engage and work with investors and a broad range of stakeholders to fully understand the changes that they need to enable the deployment of low-carbon projects. To put it plainly, we want to understand any and all barriers to investment and the steps that the Scottish Government can take to remove them.
Our efforts to secure a sustainable, prosperous and fair future for Grangemouth do not end with project willow. It is vital that the benefits of transitioning Grangemouth are felt across the totality of industry there, as well as by the workforce and, indeed, the wider community, which has an intrinsic relationship with industry. Our Grangemouth just transition plan, which has been developed in partnership with all those stakeholders, will be published next month, and that first-of-its-kind plan will outline both the strategic framework and the vision for the future of the industrial cluster. It will inform the next steps of project willow as well as wider activity that is focused on developing and growing the highly skilled workforce and support for the Grangemouth community. I am grateful to all those who took the time to respond to our recent public consultation, ensuring that the final plan will best represent a broad range of views and ambitions.
The First Minister recently made reference to the “economic crisis” facing the cluster, and we are taking decisive action. We are providing support to the workforce, who are facing redundancy as a result of the refinery’s closure. We are providing a comprehensive retraining offer, which is delivered by Forth Valley College and is equipping workers right now with the skills to transition into in-demand industries. We are grateful to both Forth Valley College and Unite the Union for their dedication in ensuring that we leave nobody behind.
Further to that, we have been clear that the valuable input of trade unions must be central to any efforts to progress the vision that is set out in project willow. I am committed to ensuring that unions and the voice of the workforce continue to have strong representation as we take the next steps. Their skills and experience are critical to securing the future of Grangemouth.
Grangemouth can and will remain at the forefront of industrial manufacturing in Scotland for years to come, provided that it is supported throughout the next phase of its journey. The businesses and the workforce at Grangemouth represent decades of energy-intensive expertise that is ready to be harnessed as new technologies become more viable. Together, project willow and the Grangemouth just transition plan are a blueprint for what is possible at Grangemouth. We now have to get on with the work to deliver it.
The Deputy First Minister will now take questions on the issues that were raised in her statement. I intend to allow around 20 minutes for questions, after which we will move on to the next item of business. I would be grateful if members who wish to ask a question would press their request-to-speak buttons now.
I thank the Deputy First Minister for advance sight of the statement.
Petroineos has confirmed that 405 workers have already been made redundant, with a further 105 to go in the next 18 months. My thoughts go out to those workers and their families. Project willow will not save those jobs. It may create 800 jobs over a 15-year period, but only if £4.25 billion is invested. Those 405 workers cannot wait 15 years.
What we are seeing at Grangemouth is what happens when an industry is demonised and a hostile environment is created. The SNP’s presumption against new oil and gas is driving investment away, and the lack of an energy strategy is, frankly, an embarrassment. The workers of Grangemouth have been failed by this SNP Government, which failed to plan ahead for this eventuality and sprang into action only when it was too late.
What work is the Scottish Government doing with other heavy industrial sites across Scotland to ensure that they do not find themselves in the same situation but have transition plans ready before closures happen? Since the publication of the report, what discussions have taken place with the site owner, Petroineos, to ascertain whether it has an appetite to invest in the projects listed in willow or whether it is willing to sell the site to someone else who will?
I appreciate that it is great rhetoric for Douglas Lumsden to spin the line that a very recent policy on oil and gas is somehow to blame, but that belies his ignorance of what has actually led to this position. The gravity of the situation at Grangemouth befits greater understanding of the factors that have led to it.
On the last question, about engagement with the site owner and the appetite to invest, there has been extensive engagement with the owner about that, and with others who have indicated an interest in investing. The point of project willow is to set out the viable projects that could be progressed with. As I said in my statement, significant interest has come to Petroineos and Scottish Enterprise.
Some near-term projects, such recycling of plastics, acetone-butanol-ethanol biorefining, anaerobic digestion and fuel switching could be delivered more quickly. The overall figure that Douglas Lumsden gave, which is over a longer timeframe, does not indicate that some of these are short, medium and long-term projects.
I thank the Deputy First Minister for advance sight of her statement.
It was great that we had the joint briefing from the Acting Cabinet Secretary for Net Zero and Energy and the UK Secretary of State for Energy Security and Net Zero when the project willow report was published last month, because the workers and the communities at Grangemouth urgently need investment. Does the Deputy First Minister agree that that joint work and co-operation between our Governments needs to continue?
It is great that the Deputy First Minister is promoting training at Falkirk College, but where are the jobs for the people doing that training? Given the scale of green jobs that have been promised over the past 17 years, we urgently need to know where those green jobs are.
Given the urgency of the situation at Grangemouth, where is the Scottish Government’s just transition plan? It was promised years ago. When will the new investment task force report? Does the Deputy First Minister agree that the focus needs to be on the jobs and industrial investment that will be delivered, so that Grangemouth continues to deliver energy security through jobs now and in the future, rather than being an import terminal?
There were a lot of questions there. As was the case with Douglas Lumsden, I probably did not cover in full a lot of those questions in my statement, so I am happy to follow up with both members to make sure that I answer them all.
The joint working must continue, because, although there has been a lot of focus on the available investment—£25 million from the Scottish Government and £200 million of ring-fenced funding from the UK Government—our understanding is that considerable policy changes need to be made. I have raised with the UK Government the nature of those policy changes.
For example, project willow’s findings chime with Unite’s view that a biorefinery that is capable of producing sustainable aviation fuel is feasible at Grangemouth, but work and investment are required first, before deployment can take place. The policy landscape needs to be altered to ensure that sustainable aviation fuel production in Scotland is possible. Therefore, collaborative work with the UK Government is not just something that is nice to have; it is critical if we want to make progress on those points.
I am happy to share a little more detail when the investment task force reports. At the moment, we are looking at the short to medium term. We will collate the expressions of interest and look for ways to progress those. Some of that work might evolve as we see the level of interest, and some of it might be confirmed later down the line.
Sarah Boyack asked other questions, but I am afraid that I could not scribble them all down quickly enough, so I will come back to her.
I welcome the Deputy First Minister’s statement. As she rightly recognised, many of the potential projects that project willow has identified would take significant time to be developed. Some of them would not be developed until into the 2030s and would require a significant deployment of capital investment in order for their potential to be realised.
Therefore, I will make two points to the Deputy First Minister. First, what further immediate action can be taken to support not only the Grangemouth economy but the wider Falkirk economy, which has been hit by the loss of jobs at the refinery and, in recent months, at Alexander Dennis? Could some of the £25 million that the Scottish Government has provided for immediate action be deployed more widely in the Falkirk Council area in order to support employment opportunities?
Secondly, the task force is to be welcomed and I acknowledge its work to date. However, in the medium to longer term, we require a governance process for driving investment in Grangemouth that will ensure that the type of capital funding that is needed is deployed strategically and aligns with the long-term vision for the area, and I do not think that the task force will be able to achieve that. Is the Government open to looking at the long-term governance arrangements for investment in the area in the medium to long term?
I counted two questions, so it was easier to note them down—I thank Michael Matheson for that.
His question about the long-term governance arrangements is absolutely legitimate. I will take that away and speak to him in detail about what he thinks would be most appropriate. He mentioned Alexander Dennis, and I had the pleasure of meeting members of that company about a week ago in recognition of the important role that it plays.
On the point about immediate action, it is well understood that, although project willow outlines plans for the short to medium term, depending on the project, there is need right now. Michael Matheson will know about the work that we have done on targeted skills support. That work is under way—more than 90 per cent of those who have come forward for a training needs assessment have had it completed. An enhanced package of support is available as part of the Falkirk and Grangemouth growth deal, and we are open to suggestions, most of which come through Falkirk Council, to ensure that the resources are targeted most effectively. The Grangemouth just transition fund is focused on supporting businesses, the workforce and the community in the immediate term.
There is a sequence: some funding is able to be deployed immediately to provide support, and some funding is being used for the longer-term vision for the site.
I thought that the Deputy First Minister was uncharacteristically vague in her answer to Douglas Lumsden’s questions, so I will ask her to clarify an important issue. As we know, the project willow report was paid for with taxpayers’ money, but Petroineos commissioned EY to do the work and to report to it, so Petroineos has known all along about the nine potential projects—I might say that it has known about them for even longer than Colin Mackay of STV.
I ask the Deputy First Minister to be not vague but very clear. First, has Petroineos made it clear that it is committed to the development of its existing site? Without the site, none of those projects will happen. Douglas Lumsden asked that very important question, and I am asking it again. Secondly, has Petroineos made it clear that it is willing to invest in any of the nine potential projects, other than to create an import terminal?
I might have given an uncharacteristic answer because, uncharacteristically, I am speaking on behalf of a third party, so there is an element of challenge in answering those questions directly.
Stephen Kerr is absolutely right to say that the UK Government and the Scottish Government provided grant funding to Petroineos to commission the work. Petroineos acted as the lead partner to reflect its role as the owner and operator of the Grangemouth refinery. An advisory board met regularly throughout the reporting period and up to the project’s conclusion. It received drafts of the project’s findings throughout that period and collectively agreed the final outputs.
On the specific questions, despite raising the issue, Petroineos has not made any firm commitment to invest in the technologies that project willow identified. We have worked with the business previously on progressing a proposal for a biorefinery at Grangemouth, but the shareholders have not taken the decision to continue with that project. In lieu of a commitment from the business, we are engaging with all parties that are interested in progressing low-carbon projects at Grangemouth.
There is no doubt that Petroineos continues to have a critical role in securing a future for the site. Whatever role Petroineos plays in the future, it has confirmed to us that it will act in good faith when engaging with businesses that are interested in deploying new projects on the existing site, which I welcome.
I hope that that answer is more characteristically clear, despite the fact that I am, uncharacteristically, answering on behalf of somebody else, hence the way in which I have answered the questions.
During the election campaign, Labour pledged to save Grangemouth. It did not. The Labour Government also continues to deny resourcing for Acorn, Scotland’s carbon capture and storage project; it has failed to take the strides that are required to ramp up sustainable aviation fuel production; and no action has been taken to change hydrogen storage and transportation regulations. All of that could have benefited Grangemouth. What are Scottish ministers doing to get their Labour UK Government counterparts to get the finger oot on those issues in order to save and create jobs?
We urgently need the UK Government to give a positive decision on the Acorn project. We have said that for a number of years, but the urgency is now heightened in light of the publication of project willow’s report, which makes it crystal clear that a decision on the Acorn project by the UK Government is required as part of determining Grangemouth’s long-term viability. It is not fair on those behind the Acorn project to make them wait indefinitely for clarity.
I have raised the issue with the UK Government. Again, I call on it to prioritise the Acorn carbon capture and storage project, and I call on members of the Parliament to join forces with me in making that call.
Kevin Stewart also asked about sustainable aviation fuel, which can be a critical component of the transition, but legislation is required in order for the regulatory changes to be made and the necessary mechanism for revenue certainty to be established.
There is also an opportunity for hydrogen to play a critical part in Grangemouth’s transition—I know that Kevin Stewart has a long-standing interest in hydrogen. We can lead the way in hydrogen production, and our hydrogen action plan clearly sets our strategic ambitions. I note that the Scottish Government is investing £5 million in Ineos Olefins & Polymers Europe’s select phase fuel-switching programme as it seeks to transition to hydrogen.
I remind members of my voluntary register of trade union interests.
Yesterday afternoon, Unite the union was in Parliament, warning that, if the Grangemouth refinery is not repurposed, if it closes this year, the infrastructure will run down or disappear altogether, the workers will go and project willow, in their words, will be nothing more than a paper exercise.
What action is the Deputy First Minister taking, even at this late stage, to prevent the refinery from closing down? Will she push Petroineos to co-operate with an urgent review of the assets at the refinery to see whether they can be converted to produce sustainable aviation fuel and, if so, at what cost? Finally, how many interested parties—I am not asking who they are—have now approached Scottish Enterprise about investing in the future of the Grangemouth site?
I thank the member for another series of questions, some of which I may not have scribbled down.
On the first point, about the infrastructure, I think that Unite makes an excellent point, which is that we have seen previously that, when there is too long a gap in a site transitioning from one purpose to another, there are additional costs. That is why getting the project willow report published now, to give us an indication of where we might go, is important. It is an issue that we take seriously.
The member knows that we have ensured that Unite the Union has been well integrated into project willow via regular standing committee meetings and so on. We are happy to continue to engage with the union.
The member made a point about how we avoid a situation happening. We do that by identifying the investable propositions as quickly as possible, securing any regulatory changes that are required, putting the money in and enabling new work to begin at the site as quickly as possible. That is possible, but it requires very clear prioritisation and focus.
The member asked how many parties are interested in the site. I am afraid that I do not have the figures in front of me, but a report from SE and Petroineos indicates that the number of interested parties is above expectations, so there is more interest than they anticipated. I have also been engaging with a number of investors who have expressed interest. The issue is then turning the interest into specific proposals.
I wrote down that the member asked another question about sustainable aviation fuel, but I do not recall what it was, so I will come to find him after this.
As was touched on in previous questions and responses, one of the key pathways that the report highlighted was the transformation of Grangemouth into a producer of sustainable aviation fuel, which is an option that the Scottish Government has long called on the UK Government to appropriately regulate for. Does the cabinet secretary share my concern that the UK Labour Government has so far concentrated on aviation fuel developments south of the border, when Grangemouth is poised to lead that industry? Bearing in mind the cabinet secretary’s important point about the need for a radical shift in policy and the regulatory landscape, what engagement has the Scottish Government had with the UK Government on the urgent need for regulatory changes to enable that?
The UK Government has made £50 million available to Teesside to develop various SAF projects. We need at least similar support for Grangemouth, and we need the UK Government to swiftly introduce its planned sustainable aviation fuel revenue support mechanism bill. The £200 million that has been ring fenced in the National Wealth Fund is really welcome, but it operates in a different way from funding that can be provided up front. I take the member’s point about the opportunity. We know the steps that need to be taken, and we are willing all parties to take them.
In the remaining one and a half minutes, there are five members who wish to ask questions. I would be grateful if we could all bear that in mind when it comes to asking multiple questions. If we could all be concise, that would be helpful.
Sizeable changes could be made to Grangemouth in the next few years. The community has lived beside an oil refinery for the past 100 years, and its sights, sounds and—often—smells are very well known. The options in project willow and the decommissioning of the refinery leave the community with uncertainty about what living in Grangemouth and the surrounding area will be like in the years to come. How will the Scottish Government ensure that the community is well engaged on and informed about the changes that are likely? What will the Government do to ensure that there is not a detrimental impact on the lives of people in the community?
The member is right to highlight the impact on the community. It is always worth saying that a number of really exciting businesses with high-growth potential are already active in Grangemouth. Celtic Renewables is one of the most exciting businesses there. Taking the community with us, informing people as much as possible and keeping in touch with local representatives is the way to do it.
It is positive that Petroineos has said that it will act in good faith. However, what does the company require from the UK and Scottish Governments to give a greater commitment to the site, so that we can seek the opportunities, which obviously exist, for a well-serviced, well-located site?
Now that the biggest opportunities have been highlighted, the process is about converting the level of interest that has been expressed to SE into genuine propositions that can be co-invested in. Project willow suggests that £4.25 billion will be required. Clearly, some of that will have to come from the private sector, so it will be a co-investment approach. We are keen to do that and our funding is available—we anticipate that the sum of £200 million will be available—and it is as simple as responding to the interest with investable propositions that all parties can back and take forward and getting those established as quickly as possible.
It is essential that the workforce and the local community have a voice in the process and a say in the support that is made available to them. We cannot stand by and lose another pillar of Scottish industry thanks to a lack of action from Westminster, and urgent action is needed to retain the skills of Grangemouth’s highly skilled workforce. Can the Deputy First Minister say any more about the Scottish Government’s latest engagement with workers and trade unions at Grangemouth?
We engage regularly with trade unions. In fact, the First Minister met them on the day that project willow was launched. We recognise the critical role that they play, and we continue to engage regularly with workforce representatives. We are hugely grateful for their candour as we navigate this period of change.
I have long been an advocate for Grangemouth’s potential to produce sustainable aviation fuel, which has been mentioned already. The Deputy First Minister spoke about legislation being introduced potentially before the summer. Is that just her wish, or has she been told that there will be such legislation?
I am afraid that I am not able to confirm what legislation the UK Government will definitely introduce, but that is what we believe the timetable needs to be in order to achieve our wider ambitions.
Rightly, there has been much focus today on the importance of the local economy and Grangemouth’s significance to the national economy. If the recommendations are progressed, what will the positive benefits be for the regional economy of the Firth of Forth, which includes the port of Leith?
There could be significant opportunities. On a day such as today, we are all very conscious of the geopolitical international risks that we face. Therefore, backing our industries and creating jobs in Scotland become even more important.
Businesses that are based at Grangemouth contribute significantly to Scotland’s economy and to the wider region, so I see huge opportunities for the whole of Scotland, including the port of Leith.
That concludes the ministerial statement on project willow. I will allow a moment or two for those on the front benches to get organised.
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