Report Warns of Need for Accelerated Action and Intensive Work to Avoid “Disorderly and Unjust Transition” at Scotland’s Only Oil Refinery
The Just Transition Commission (JTC) has issued a report warning of the urgent need for accelerated action and intensive work to avoid a “disorderly and unjust transition” at Scotland’s only oil refinery, which is likely to close in 2025. The Grangemouth refinery, operated by Petroineos, is expected to shut down, potentially impacting hundreds of jobs. The JTC expressed concern over the lack of effective just transition planning thus far.
Petroineos had previously announced plans to close the refinery and convert the complex into an import station for finished fuels. In response, the Scottish and UK governments have funded Project Willow, which aims to explore alternative ways for the site to continue playing a role in the energy sector as the world transitions away from fossil fuels.
According to the JTC report, the two governments can play a positive role in reshaping the economy of Grangemouth, but only if efforts are adequately resourced and approached as an urgent priority of national importance. The report highlighted the need for a just transition plan for the site, stating that it presents a major opportunity to reset relations between industry, workers, community, and the public sector, ultimately bringing significant gains for Grangemouth.
However, the report also emphasized the need for an accelerated schedule of intensive work, with regular in-person meetings, in order to achieve this goal. As it stands, the report warns that without effective planning, the likely closure of the refinery in 2025 will result in a disorderly and unjust transition.
The Grangemouth refinery is one of only six in the UK, with the Scottish site accounting for about 14% of the country’s overall refining capacity. It supplies nearly two-thirds of Scotland’s demand for refined oil products and has the capacity to meet 100% of the demand. However, due to economic conditions, it traditionally exports around 40% of the fuel it produces.
As the world moves towards a low-carbon future, the report stated that a new future for the site and its workers is inevitable. It called for the involvement of workers and communities in shaping the closure and transition in a socially positive way.
The JTC expects to see a draft plan agreed upon by the end of September. The report also emphasized that any public money or subsidies given to support the transition must come with conditions, such as fair work, community benefit, or profit-sharing mechanisms.
In a statement, Iain Hardie, from Petroineos, acknowledged the opportunity for Grangemouth to be at the forefront of low-carbon fuels manufacturing. However, he highlighted the need for meaningful engagement between industry and government in order to overcome hurdles and map a clear route towards this goal. He also welcomed Project Willow and expressed hope that it will enhance understanding of the potential for Grangemouth to play a significant role in developing low-carbon fuels.
The Scottish government has assured that it will leave no stone unturned in securing a sustainable future for Grangemouth. Acting energy secretary Gillian Martin has been in discussion with UK Secretary of State Ed Miliband, who has agreed to co-chair the Grangemouth Future Industry Board Leadership Forum.
A spokesperson for the Scottish government stated that a draft Grangemouth Just Transition Plan will be published soon, which will include a first-of-its-kind vision for the site, the long-term goal of achieving net zero operations by 2045, and how both the Grangemouth workforce and surrounding community can benefit from the transition.
