A £100 million rescue package has been announced in a bid to save workers facing the scrap heap because of the closure of Scotland’s last oil refinery.
In a joint move, the Scottish and UK governments have announced they will pump cash into existing industrial projects in and around Grangemouth, where the Petroineos refinery is set to close by next summer.
The closure is expected to axe 400 jobs, as the refinery will become a much scaled-down import and distribution hub for fuel products.
The site will not be nationalised, with both governments accepting the businesses’ assessment it is not economically viable because it cannot compete with more efficient refineries in the Middle East, Asia and Africa.
Some £20m will be split evenly by the Scottish and UK governments to be invested in existing industrial sites in the area, with firms being incentivised to take on Grangemouth workers facing redundancy.
The remaining £80m will be used to encourage new businesses to set up shop in the region and take on Grangemouth workers.
Scottish Energy Secretary Gillian Martin said: “The Scottish Government has consistently made clear our preference was for refining to continue as long as possible, and we have continued to press the shareholders for a positive decision until the 11th hour.
“This significant package of support combines immediate help for affected workers and a long-term contribution to ensure that Grangemouth continues to thrive in the future.
“We are clear that there should be a just transition for the refinery site and we remain committed to bringing forward low carbon opportunities that will sustain skilled jobs across the wider area for many years to come.”
Ed Miliband (below), the UK Energy Secretary, said it was “deeply disappointing” the oil refinery would close, adding: “We will stand with the workforce in these difficult times, that is why we are announcing a package of investment to help the workforce find good, alternative jobs, invest in the community and serve a viable industrial future for the Grangemouth site, with potential for future support from the National Wealth Fund.”
But trade unionists fear the extra cash will not be enough and have demanded both governments do more to save the refinery.
Unite general secretary Sharon Graham said: "This is now the last chance for this Labour Government to show whether its really on the side of workers and communities. The road to net zero cannot be paid for with workers' jobs.
“The Government must put its money where its mouth is to ensure the jobs are safeguarded. This is the only refinery left in Scotland and it must remain. There are alternative plans.
“This is yet another example of workers paying for a crisis they did not create while billionaire owners laugh all the way to the bank."
The union has said it is in talks with the Government about using the refinery as a factory to produce sustainable aviation fuel, which can reduce aeroplane emissions by up to 80%.
Derek Thomson, Unite's Scottish secretary, said: "The sole objective for Unite remains that the jobs at the refinery and thousands more in the supply chain are protected by any means.
“Unite does not accept that the future of the refinery should have been left to the whim and avarice of shareholders.
"The complex is critical to the nation’s manufacturing base and energy security. The governments involved cannot simply hide behind the convenient smokescreen that this is a commercial decision which they couldn’t influence.”
Roz Foyer (above), the general secretary of the Scottish Trades Union Congress, added: "Workers have, yet again, been despicably failed by politicians and governments who have been utterly inadequate in persuading Petroineos to expand the lifespan of the refinery.
“It is the job of governments to be ahead of the curve, deliver strategy and smooth the course of the transition. In all these respects both Scottish and UK governments have failed entirely."
The £80m for new projects will be handled by the Falkirk and Grangemouth Growth Deal, which is expected to boost the local economy by around £2m per year and create 55 jobs in the next year, with 1660 expected in the next three decades.
There is also a £1.5m boost to the Project Willow study, which is exploring future uses for the site. So far it has identified three "credible" options, which are the manufacture of either low-carbon hydrogen, clean eFuels or sustainable aviation fuel.
Elsewhere, the £80m fund is expected to aid the creation of a plant which hopes to use waste whisky and food to make chemical production processes greener.
Some will also go to a £9m technology centre to support the development, manufacture and use of low carbon technologies, specifically looking at hydrogen and carbon capture.
Money will also be pumped into an employment hub at Forth Ports, with the aim of ensuring continued skilled employment for Grangemouth workers in renewables.
