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The next item of business is a statement by Kate Forbes on the cessation of refining at Grangemouth. The Deputy First Minister will take questions at the end of her statement, so there should be no interventions or interruptions.
14:51
Yesterday’s news that Petroineos has now ceased refining at Grangemouth is a devastating blow to Scotland’s economy, the workforce and the local community. My thoughts are with all the workers who are impacted as they navigate these difficult times. Although we have anticipated this moment since Petroineos made its decision last September, it is nonetheless a dark moment in Scotland’s industrial history.
The Scottish Government has consistently engaged with and supported both Petroineos and its shareholders. Since March 2020, we have worked positively and collaboratively with the business to secure its operations in incredibly challenging situations and to seek to support its transition to other technologies. We have invested more than £6 million over that period directly in Petroineos and its shareholders. We are also ensuring that we support the wider area with investment of a further £81 million through the Falkirk and Grangemouth growth deal, the Grangemouth just transition fund and other activities.
I continue to advocate that the decision of last September was and is premature. It jeopardises our transition to net zero, negatively impacts the Scottish economy and leaves us reliant on imported fuel. We have continually called on the United Kingdom Government to do more to intervene and stop this needless act of economic vandalism. If it can intervene at Scunthorpe, surely it is necessary for it to do so at Grangemouth. The UK Government could have chosen to underpin operations at the refinery to bridge the transition to new technologies or, as we have repeatedly called for, intervened to enable sustainable aviation fuel production at Grangemouth.
However, it is not too late. The UK Government could still choose to intervene at this late stage and deliver a different result. The scale and magnitude of such an intervention would require UK Government involvement—it is not something that the Scottish Government could do alone. At the very least, we need to know and understand what assets at the refinery could potentially be used to help Grangemouth contribute to our net zero economy in the future.
Yesterday, the Acting Cabinet Secretary for Net Zero and Energy wrote to the UK Government to urge it to join her in support for Unite the union’s proposal for a review of those assets to inform our work. I reiterate that call and urge the UK Government to get behind that proposal immediately and ensure that we lose no further time. Doing so is critical not only to bringing forward new business, but to ensuring that people who are directly impacted by the decision know that we have their backs.
The workers are at the forefront of our minds. We have not been idly standing by while those highly skilled individuals are put out of work, bringing to their families uncertainty and worry about what comes next. We have already provided £450,000 of funding to support their transition into other roles through a bespoke skills intervention that is being delivered by Forth Valley College. I am pleased that 168 workers are already engaging in retraining activity, and that the majority of the remaining workforce have registered for training that will commence in the coming weeks.
We have prioritised those workers who will be leaving the refinery in the near term to ensure that they are supported and assisted in their transition, and that they are helped to secure other employment and to use their valuable skills to continue to contribute to Scotland’s economy.
Although it is regrettable that that intervention has been needed, it is an excellent example of how the Scottish public sector has collaborated with Unite the union to ensure that those workers get the support that they need and deserve. I pay tribute to Unite, which has supported the design and delivery, and now the deployment, of that intervention. Unite’s support has been unwavering, and we are grateful for its candour and its efforts to ensure that that provision meets the needs of those individuals.
The voice of workers who have the experience and the expertise will be critical as we seek to secure a long-term and sustainable future for the industrial cluster. Their role and input will continue to be central as we drive forward activity that secures that ambition.
Project willow is being spearheaded by an investment task force that is led by Scottish Enterprise. I am pleased to inform the Parliament that we have seen tangible progress with regard to interested investors and technology providers. As we seek to work with interested parties, the insight of the workforce and Unite will be critical in ensuring that we capitalise on those opportunities.
The Acting Cabinet Secretary for Net Zero and Energy received the first progress report from the task force this morning. It is clear that real progress is being made on the outputs from project willow and other associated manufacturing opportunities. Scottish Enterprise is dealing with 66 inquiries, which are aligned with the full range of technologies that are set out in the report, as well as with manufacturing activities that are carried out across the wider cluster. Scottish Enterprise has developed a triage process for assessing those projects quickly, which will lead to due diligence on those that offer the best near-term fit. Scottish Enterprise and my officials are working closely together on activity across the whole cluster, with a view to realising the full potential of the site’s transformation.
Scottish Enterprise’s approach is not limited to dealing with inbound inquiries; it also includes marketing the Grangemouth opportunity to the world. To that end, Scottish Enterprise is undertaking investor outreach work to attract world-class projects and investors to the site.
Clearly, Petroineos must and will continue to have a critical role to play in the future. The transition of Grangemouth is dependent on Petroineos, as the landowner, acting responsibly. We have engaged positively with the company during its tenure as operator, and I am committed to continuing that. It has given assurances to ministers and officials that it will act as a responsible landlord, and the Government will hold it to that commitment.
Petroineos has not yet committed to making any investment in the projects that are proposed in project willow, but we are engaging with the company and its shareholders to chart a mutually beneficial course that could lead to future investment.
Businesses have made it clear that flexible funding should be made available to support their ambitions, and our recently announced Grangemouth just transition fund will be a key tool in bringing forward future investment at the site.
The early positive progress that Scottish Enterprise has reported has been made has been catalysed by the Government’s commitment. However, we cannot do this alone. Although I welcome the £200 million that has been allocated from the national wealth fund, we know that, by its nature, that funding is somewhat restrictive. It does not have the ability to support early-stage technologies that require immediate support. We therefore hope that the UK Government will do more. We call on it to apply the full flexibility of its resources to support investment at Grangemouth. That includes making a timely decision on the Acorn project, which we still await and which is absolutely essential for the future of Grangemouth.
We have repeatedly suggested that the UK Government should make immediately available the whole £10 million that it announced as part of the Falkirk and Grangemouth growth deal, and I reiterate that proposal again today. That would be a tangible start in supporting businesses here in Scotland that need that support now.
I reaffirm the Government’s commitment to doing all that we can, within the limited powers that we have, to secure a long-term and sustainable future for Grangemouth. The decision by Petroineos is nothing short of an economic crisis. We need the UK Government to work with us to respond quickly, as we know that it can.
It is a very sad day for Grangemouth and for Scotland. We are deeply sorry for the workers and the wider community. The Government will work tirelessly to secure the future that both the workers and the community of Grangemouth deserve.
The Deputy First Minister will now take questions on the issues 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. It would be helpful if members who wish to ask a question were to press their request-to-speak buttons.
I thank the Deputy First Minister for sight of her statement before she delivered it in the chamber. This is a dark moment for Grangemouth, for Central Scotland and for Scotland as a whole. The workers and the community in Grangemouth should be at the forefront of our thinking, our words and our actions.
Bluntly, I am deeply concerned that Scottish National Party politicians are playing a constitutional game with the closure of the refinery at Grangemouth. That is not acceptable. The SNP Government cannot escape responsibility by pointing fingers at Westminster. This is the result of years of mixed messages and ideological hostility to Scotland’s oil and gas industry from both the SNP and Labour. A presumption against oil and gas has consequences. Instead of politicising this industrial crisis, ministers should focus on clarity and delivery. The people of Grangemouth deserve a straight account of what is happening, not posturing.
I have several questions for the Deputy First Minister. First, has Petroineos given any firm commitment to redeveloping the site? If not, what contingency plans does the Government have in place for redevelopment of the site? Secondly, if Petroineos continues to withhold investment in any of the nine potential project willow projects, does that put any of those projects in jeopardy? Thirdly, does the Scottish Government—
Mr Kerr, I remind you that you had one minute and 30 seconds to speak, as agreed with your party business manager. You have now spoken for one minute and 53 seconds. The Deputy First Minister has already got some questions that she can be getting on with.
To use Stephen Kerr’s words, I believe that my statement was exactly in line with his call for clarity and delivery. That is precisely what I provided in the statement. This is not about pointing fingers; it is about delivery as quickly as possible of jobs and opportunities. Grangemouth has been a key part of our industrial heritage for generations, and it must be the centre point of our industrial future. That is what we intend to deliver through project willow.
Mr Kerr will be pleased to know that I specifically included in my statement answers to some of his specific questions about Petroineos, because I knew that he would ask them. In my statement, I said that Petroineos has not yet committed to making those investments. He asked whether that jeopardised project willow—it does not.
Project willow is all about working with partners. I mentioned that we have had 66 expressions of interest, some of which are in line with project willow. Others are not in line with project willow but could present incredible opportunities. Those potential partners have been attracted by the supportive environment that they have found here in Scotland.
Petroineos has said explicitly to the Government that it will be a responsible landowner and landlord that is supportive of the investment work that needs to happen. I hope that that has answered Mr Kerr’s questions.
Yesterday will have been an incredibly difficult day for the hundreds of workers at Grangemouth and for the wider community. They are right to ask what actions their Governments have taken.
Within months of taking office, the UK Labour Government committed £200 million of investment for Grangemouth’s industrial future. Unfortunately, that contrasts with the Scottish Government’s actions. The SNP Government was made aware by Petroineos five years ago that refining was under threat. The Deputy First Minister therefore has to answer this question: in that time, did any one of the five different cabinet secretaries responsible develop any real plans for the refinery’s future?
Today, the Deputy First Minister strongly hints at nationalisation, although she stops short of calling for it. Did her Government ever raise that with the previous Conservative Government or with Petroineos? Indeed, has the Government ever asked its civil servants to consider such options? In the dozens of meetings that the Scottish Government has had with the new UK Labour Government in recent months, has it once raised the topic? If the cabinet secretary cannot point to that evidence, are people not right to conclude that the Scottish Government is producing that option at the last minute to turn this devastating event into a political football, and are they not right—
Thank you, Mr Johnson.
—to conclude that the SNP Government has done nothing in the last—
You have had your allocated time of 1 minute—thank you, Mr Johnson.
Knowing, also, what Daniel Johnson might ask, I included the answer in my statement up front: I said very clearly that, since March 2020, we have worked with the business, investing in excess of £6 million over that period. July 2021, July 2022, August 2023, July 2024 and August 2024 are all examples of when the Government has worked collaboratively with Petroineos and shareholders to consider options for their future. I can assure the Parliament that this Government has been actively at work to secure the future of this key industrial asset.
Daniel Johnson mentioned the nature of our conversations with the UK Government. As we have said repeatedly, we believe that we should leave no stone unturned to secure the future of Grangemouth—that was the case, first, with the Conservative Government and then with the Labour Government. I am young enough to remember when Labour promised that, if it were elected, it would save the plant.
The Grangemouth refinery closure means that 430 workers have been made redundant. My thoughts are with every single one of them and their families. They have been let go by Petroineos and let down after Scottish Labour’s pledge that it
“would step in and save the jobs”.
UK Labour was able to underwrite a loan guarantee for a plant in Antwerp, to step in and save British Steel in Scunthorpe, to nominate sustainable aviation fuel sites anywhere but Scotland and to progress with carbon capture and storage in Teesside and Humberside. Even the local Labour MP concedes that Westminster treats Scotland as an afterthought. We need our Scottish Government to work hard to replace jobs as soon as possible.
Could I have a question, please, Ms Thomson?
Small and medium-sized enterprises are among the most innovative companies in the energy sector, but often they do not operate at the scale required to access the available finance, such as from the national wealth fund.
The Deputy First Minister mentioned the role of Scottish Enterprise so—
Ms Thomson, I need a question, please.
—what actions is the Scottish Government taking to ensure that it is given a fair hearing, given the likelihood that it is able to create quality jobs at scale?
The member is absolutely right to talk about the innovation of SMEs. We now have a system, led by Scottish Enterprise, that triages all inquiries that reach it from SMEs and other companies and investors that want to be part of Grangemouth’s future. I mentioned the 66 inquiries, and Michelle Thomson and I separately met representatives of one such interested company this morning. The innovation coming from those investors and developers that I am hearing about is extraordinary.
We have previously talked about the fact that project willow will be spread over a number of years, but some opportunities can be accelerated, because they are ready to go. We are committed to ensuring that companies can access units, relocate to Grangemouth and start to employ people as quickly as possible.
Underpinning project willow is the need to have an energy strategy, which would provide some clarity. Where is it? When will it be published? Does the Government realise that getting that wrong and leaving in the presumption against new oil and gas could mean Grangemouth-equivalent redundancies every week from now until 2030?
I do not know to whom the member is talking, but if he thinks that all that it takes is an energy strategy to attract investment to Grangemouth, he is speaking to the wrong people. We are ensuring that there is funding available—£25 million—and that we have a clear process for taking inquiries, triaging them and supporting companies to relocate, and ultimately for delivering the employment that we want in order to ensure that Grangemouth continues to play a key part in our industrial future.
Jobs and livelihoods are being lost as we speak in the chamber today, which is placing workers and their families in an extremely difficult situation. Alongside that, we are losing important skills and knowledge from the workforce, which could be lost to Scotland for the foreseeable future. Such skills and knowledge will be critical in helping to deliver nine of the key areas that were identified in project willow in the medium to longer term. What priority has been given to securing investment in the short term that will help to maintain and support those critical skills and knowledge in the Grangemouth area?
The member is absolutely right that we need to retain the skills and the knowledge, and he will be aware that it is those skills and that knowledge that are of particular interest to potential investors. Some of the expressions of interest that have reached me, which I know have come via the member, are short term—in other words, those investors are willing to relocate or set up a new facility in the Grangemouth area quite rapidly. We want to work at pace to ensure that they can do that and thereby retain the skills and the knowledge on the site.
Having attended both project willow briefings, I agree with the need for urgent action. Can the Deputy First Minister give us a timescale for the Scottish Government’s delivery of the regulatory changes to enable the use of Scottish deposit return scheme waste resources, bioresources and agriculture and forestry resources, which are critical for the development of sustainable aviation fuel and the hydroprocessed esters and fatty acids—HEFA—process?
I thank the member for that point, because she is absolutely right that this is not just about funding—it is also about regulatory changes. She will perhaps be aware from previous answers that I have given that that is one of the areas that we are trying to accelerate with the UK Government, by working together to accelerate such changes. That is not entirely within my gift, and we need to work collectively with the UK Government on that, but from our perspective, all of that is to be done as quickly as possible.
This is another example of successive London-based Governments snubbing Scotland. The Acorn project at St Fergus in my constituency, which was delayed again and again, was key to Grangemouth, and now that project is in jeopardy. That is a disgrace. While billions of pounds are found for projects in England, Scotland is left behind. Does the cabinet secretary agree that, given the implications for industry and the just transition for both Grangemouth and the north-east, Acorn must be an immediate priority?
There is absolutely no doubt that the development of Acorn is vital to support the decarbonisation of Scotland’s industry and the future of industries at Grangemouth and across Scotland. We urgently need clarity on the Acorn project; we have been waiting for that clarity for an awfully long time. We need the UK Government to confirm the track 2 status at the earliest opportunity and provide funding for the Acorn project, to end the uncertainty and give even more momentum to the opportunities in and around Grangemouth.
Although the retraining project is very welcome and I am glad that Unite has been so engaged, the gap between the end of refining and what comes next on the site currently seems to be unknown. The Deputy First Minister referred to Unite’s ask for an audit of the assets, but in addition, we need to find out how long it may take to decommission any parts of the refinery in order to ensure that we lose as few skills as possible from the area. Does the Deputy First Minister have any assurances from the operator on the timeframe for how long it will take to prepare the site to enable other industries to use it?
There are a number of points. First, we want to shrink the gap by accelerating opportunities. With regard to the audit, the letter on that was sent just this morning or last night, and I will update the member as soon as I have a clearer answer.
I thank the Deputy First Minister for advance sight of her statement. I, too, associate myself with her comments about the workers, their families and the community at this difficult time.
Many of the workers at the refinery will be looking for more secure work. We have a shortage of skilled workers in many sectors, as other members have highlighted. I note the training programmes, but does the Deputy First Minister have an understanding of how many of those skilled workers plan to remain in Scotland, so that we do not lose their skills to other countries?
I mentioned the funding that the Government has invested. We are working with the wider workforce across the entire industrial cluster. The member is right to say that, at a time when we have a skills shortage, which is indicative of the pace of growth across some of our industries, the skills and knowledge that Grangemouth workers have are in high demand. We are committed to supporting the retraining effort. Clearly, we want to retain all those workers, and we are working as hard as possible to do that.
Project willow confirmed that one option for the future of Grangemouth was the production of sustainable aviation fuel, which the Westminster Government has spent £50 million on to benefit Teesside. Has the cabinet secretary had any engagement with the UK Labour Government about SAF investment for Grangemouth in Scotland? Does she share my concern that Westminster has focused solely on the development of sustainable aviation fuel south of the border and that, once again, Scotland has been treated as an afterthought?
We have been calling for more investment, and specifically more flexible forms of investment, from the UK Government, but we will also require more than investment. Project willow clearly states that we need UK ministers to think about the regulatory landscape and, in particular, the recommendations on the HEFA pathway, which recommends a delay to the implementation of the HEFA cap and an exemption for domestic feedstocks, alongside consideration of oil-based cover crops as an eligible feedstock under the SAF mandate. I have gone into that level of detail because we need clarity on both. We want decisive action to be taken so that there is a sufficient incentive for sustainable aviation fuel production in Scotland as well as what is progressing at pace in Teesside.
We need to avoid future closures in the energy sector after refining at Grangemouth comes to an end. Gary Smith from the GMB union has described Labour’s decision not to grant new licences for oil and gas extraction in the North Sea as “absolute madness”. The Scottish Government is very coy about where it stands. Can the Deputy First Minister clearly say whether the Scottish Government supports the granting of new licences for projects such as Rosebank—yes or no?
I think that the Scottish Government has been crystal clear that we need energy security to be prioritised and that we need the right energy mix to ensure that we have that security. More than anything else, people in Scotland want cheaper energy bills. The member started his question by talking about industrial failings. He will know that the high cost of energy is nearly always cited as a reason for that. If we want a sustainable industrial base across Scotland, we need to reduce the cost of energy so that it is competitive with energy charges across Europe and further afield.
We cannot sit back and watch another economic crisis unfold in Scotland because of Westminster inaction. Can the Deputy First Minister speak further about what steps the Scottish Government is taking to help to preserve the skills of Grangemouth’s workforce as we continue our just transition?
We have worked with Forth Valley College to assess the training needs of those who have lost their jobs and to deliver tailored reskilling to support their future employment. We value those highly skilled workers and the contribution that they can bring to realising the potential of project willow and the wider opportunities across the cluster. The skills intervention is being delivered in consultation with Skills Development Scotland, Unite the union and the UK Government to ensure that we support the retention of those skills.
I remind members of my voluntary register of trade union interests.
Given that Petroineos has stated that it will not take forward any of the nine proposals in project willow, what contact, if any, has Scottish Enterprise had with new, serious potential investors? If there have been 66 related inquiries, how many of those will generate jobs, in what, and—critically—when?
Of the 66 inquiries, which reach across the Grangemouth cluster, seven are willow technology-fit projects; 14 are non-willow technology-fit projects; three do not fit directly within willow projects, although we are still supporting any expressions of interest; one is an innovation project; and 41 are classified in other places in terms of different services, supply chain inquiries and so on. We have that granular level of detail, which allows us to triage an inquiry to understand what a business needs in order to progress—for some, it might be a site, and for others, it might be something else. Once we have identified that, we work round the clock to provide the support to accelerate any expressions of interest.
As has been said, because we know that skills and knowledge are one of the aspects that those companies are most interested in, we want to ensure that, where there is interest, we can move at pace, so that people are re-employed as quickly as possible and the gap is shrunk.
That concludes the statement. To allow front-bench teams to change positions, there will be a short pause before we move to the next item of business.
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