Refinery demands

Johnson calls for clarity on Grangemouth future

Daniel Johnson wants urgent action on Grangemouth’s future

Scottish Labour has demanded government ministers apply more pressure on chemicals giant Petroineos to continue refining at Grangemouth, or confirm what other plans it may be considering for the site.

The company has said the plant’s future is under review amid speculation that it may close in 2025, putting skilled staff out of work and jeopardising a key industry.

Scottish Labour’s economy spokesperson Daniel Johnson noted that the site is profitable and the company has secured critical investment in the hydrocracker. It is thought to have restarted and is likely to help delay closure. One source told Daily Business last week that there is no firm plan by Ineos for closing the plant next year.

Mr Johnson is urging clarification on its future. “Both of our governments must get round the table to discuss both urgent action and a real long-term plan to keep Grangemouth working,” he said.

Energy minister Gillian Martin, defended the government’s level of engagement with Petroineos, saying talks have taken place with the company about the continuation of refining or turning it into a processing plant for sustainable aviation fuel (SAF), a proposal backed by the airline industry.

In a reply to Mr Johnson, the minister said she met the chief executive of Petroineos on 27 March when she “made clear the Scottish Government’s commitment to continue to engage constructively with the business.”

Gillian Martin: talks taking place (pic: Gillian Martin website)

Other meetings have taken place involving the trade unions and the Grangemouth future industry board. She will next meet the Unite union in June.

“Petroineos is making commercial decisions, and it has actually outlined them,” she said.’ It would not be fair to air in public what those commercial decisions have been based on because that is confidential.”:

Ms Martin added: “One of the key aims of the Scottish Government, working in partnership with the United Kingdom Government and, indeed, the wider Grangemouth community, is to see how we can secure the refinery for the future.

“We are keen to look at whether it could become a biorefinery, and we are looking at ways in which we can influence the UK Government to bring down the hydroprocessed esters and fatty acids—HEFA—cap so that it could be one of the first movers in sustainable aviation fuel.

“That is one of the areas in which there are real opportunities for the refinery. Our colleagues at Petroineos agree with that, and we are working towards it.”

Edinburgh airport chief executive Gordon Dewar has called for a renewed push from government ministers to convert the Grangemouth refinery to the production of SAF.

Mr Dewar told an event in Edinburgh in March that the airline industry wants to make the switch to SAF and turning Grangemouth into a manufacturer would give the refinery a future beyond 2025.

Gordon Dewar, CEO at Edinburgh Airport, and United Airlines want more sustainable aviation fuel

Petroineos has undertaken a feasibility study, co-funded with the Scottish Government, to assess whether the refinery has the potential to make the transition.

But because there are not enough sources to produce it at meaningful scale there are limits on the number of factories. The UK has plans to build five, all of them in England. Limited supply is also making it four times more expensive than standard aviation fuel.

Scotland’s Economy Secretary Mairi McAllan said earlier this year that Grangemouth could become home to “Scotland’s only sustainable aviation fuel production plant, capable of meeting future aviation demands for decades to come”.

She said a transition to hydrogen production and biofuels manufacturing potentially offer the opportunity to transition to “new sustainable jobs”

The UK’s Minister for Energy Security and Net Zero Graham Stuart told a meeting of the Grangemouth Future Industry Board on 18 January that lifting the cap was unlikely.

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