Scotland’s last oil refinery is at risk of an unjust transition similar to what previously happened to coal and steel workers in the 70s and 80s, a new report has warned.
The Just Transition Commission (JTC) said accelerated action and intensive work is needed to avoid a “disorderly and unjust” future for the workers at Grangemouth.
The expert group – set up to advise the Scottish Government on how to cut emissions in a fair way – warned of a lack of effective planning for the site where 400 workers are expected to lose their jobs by 2025.
Petroineos announced plans last year to close the oil refinery and switch the complex to become an import station for finished fuels.
Number 10The Scottish and UK governments have said they are keen to work together and the issue was high on the agenda when Prime Minister Keir Starmer met First Minister John Swinney in Edinburgh shortly after his election victory.
The two administrations are funding the £1.8m Project Willow report exploring how the site can continue to play a role amid the move away from fossil fuels.
The JTC report said that “provided efforts in this area are adequately resourced and approached as an urgent priority of national importance from now on”, the two governments “can each still play a positive role in reshaping Grangemouth’s economy”.
It described a just transition plan for the site as being a “major opportunity to reset relations between industry, workers, community and the public sector so that the energy transition can bring major gains for Grangemouth”.
But the Just Transition for Grangemouth report added that achieving this “will require an accelerated schedule of intensive work via regular in-person meetings”.
As it stands, it warned: “The likely closure of the refinery in 2025 and lack of effective just transition planning to date means the current path will deliver a disorderly and unjust transition.”
Grangemouth is one of six oil refineries in the UK with the Falkirk site accounting for about 14% of the overall refining capacity.
It supplies almost two-thirds (65%) of demand for refined oil products in Scotland – although it has the capacity to meet 100% of demand.
However, wider economic conditions mean it traditionally exports about 40% of the fuel it produces.
iStockThe JTC said it expects to see a draft plan agreed by the end of September, stressing in developing this there should be “dialogue with workers and meaningful participation of the community and other stakeholders”.
It added that all public money and subsidies given to support the transition must come with conditions – such as those ensuring fair work, community benefit, or profit sharing mechanisms.
Describing the refinery as an “important industrial facility and source of livelihoods”, the group stressed the “just transition plan for Grangemouth must earn the trust of the workforce and the local community”.
Iain Hardie, regional head of legal and external affairs at Petroineos, said: “There is a great opportunity for Grangemouth and the skilled workforce here to be at the vanguard of low-carbon fuels manufacturing, but there are a number of hurdles to overcome and questions to answer before we can map a clear route to that becoming a reality.
“As the JTC report points out, meaningful engagement between industry and government is vital.
“Delivering change will require all stakeholders to work collaboratively to develop complex commercial ecosystems which do not yet exist or are not currently economically viable without legislative or regulatory support.
“As such, we welcome the new Project Willow partnership with our colleagues in the UK and Scottish governments and hope it will enhance our collective understanding of the potential for Grangemouth to play a significant role in developing the low-carbon fuels of the future.”
Derek Thomson, Unite Scottish secretary, said: “Unite welcomes the Commission’s demand that government support through public funds is necessary during the Just Transition journey and workers need to have a meaningful and direct role during this process at Grangemouth.”
“There is no doubt that there has been a sea change in government attitude both at Holyrood and Westminster towards the refinery’s future following Labour’s election victory.
“Unite continues to positively engage with both governments and Petroineos so that we can unlock investment and in partnership find a pathway to securing an extension in the lifespan of the oil refinery.”
“We are crystal clear that a Just Transition must take place in a managed and orderly way. We cannot allow oil and gas workers to become the coal miners of our generation.“
“Grangemouth is one of the greatest tests the transition process will ever face in Scotland. We need to get this right for the 500 workers based at the refinery and thousands more dependent upon it in the wider supply chain.”
A Scottish Government spokesperson said it will “leave no stone unturned” in securing a sustainable future for Grangemouth, and welcomed the Just Transition Commission report.
The spokesperson added: “Acting energy secretary Gillian Martin has had early constructive discussions with UK secretary of state Ed Miliband about this over the past fortnight and we welcome that Mr Miliband has agreed to her invitation to co-chair the Grangemouth Future Industry Board Leadership Forum to take this vital work forward as well as their commitment to working with us to secure our collective ambitions for the Just Transition of the industrial cluster.
“We will shortly publish a draft Grangemouth Just Transition Plan, which will include a first-of-its-kind vision for the site, the long term net zero operations we would hope to see take place by 2045 and how both the Grangemouth workforce and surrounding community can benefit from the transition.”
Miliband, the UK’s energy secretary, added: “We are committed to boosting growth through an industrial strategy and to engaging with the workers and communities of Grangemouth and the Scottish Government.
“That’s why we will be immediately funding work to explore options for a sustainable future for the site in partnership with the Scottish Government.
“I will also be co-chairing the Grangemouth Future Industry Board Leadership Forum to take this vital work forward.”
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