What are the Grangemouth 'industries of the future'?

For workers at the PetroIneos refinery, whose closure has been slated for next year, said Chris Hamilton, Unite the Union convenor at the site, the statements offered hope. 

“Up until this point confidence was very low," he said. "The union previously did a survey of refinery workers and at that time 88% of refinery workers said that politicians, in their opinion, weren’t doing enough on this issue. At that time only 3% had any confidence in the Just Transition. But the discussions that now seem to be taking place with both  the new UK prime minister and also the FM in the Scottish Government, are very welcomed by the workforce.” 

But what precisely are those industries of the future? With 500 jobs hanging in the balance, and only 100 of them likely to be placed in the new import terminal, the question is key.

The message from PetroIneos has remained clear. Last week the company, a joint venture between Petrochina and INEOS, reiterated that the site is losing money. A Bloomberg article reported its statement saying, “Shareholders have lost over $600 million (£468 million) since 2011 in simple cash terms and clearly this is not tenable going forward.”

Equally clear is the message from devastated workers, repeated in recent months, and throughout the election, in Unite the Union’s campaign slogan, ‘Keep Grangemouth Working’.

The campaign’s demands, were, said Mr Hamilton,   “extend, invest and transition”.

“Note," he added, "that extend and invest come before transition. From our point of view the path that has the least or no job losses would of course be to extend the refinery for as long as it needs to run for – and meanwhile you accelerate these other opportunities.” 

The point was reinforced by Derek Thomson, Unite Scottish secretary. "The aim for Unite is to secure an extension in the lifespan of oil refinery while delivering an acceleration in viable projects being established at the complex."

"There are a number of projects that can be developed at Grangemouth including the production of sustainable aviation fuel which could supply all of Scotland’s airports. This call is also being supported by industry leaders. There is also a range of biorefining, hydrogen, carbon capture and storage opportunities which could be speeded-up with the support of government."

(Image: PA)

Hydrogen: hype or hero?

One of the biggest new technologies being touted for Grangemouth has involved carbon capture and storage. Dame Jackie Baillie, for instance, talked of "a decarbonisation hub, linked to carbon capture and storage projects". 

Such plans have been germinating for some time. In 2022 INEOS O&P UK announced plans to develop a low-carbon (blue) hydrogen production unit for Grangemouth, manufacturing hydrogen from methane and then exporting the CO2 deep underground in the North Sea, into depleted gas reservoirs, via the Acorn transport and storage system.

The company, which runs the chemical plant producing at Grangemouth, said that it was taking a step towards the production of low carbon hydrogen fuel by investing in a low-carbon hydrogen plant, by inviting engineering design contractors to tender.

But a key question is how close to realisation the Acorn Project’s carbon capture and storage developments, which the UK only finally committed to funding last year, are. 

A report on Grangemouth Hydrogen Hub by Scottish Enterprise, published earlier this year, noted, “The progression towards blue hydrogen production could face delays due to the absence of adequate infrastructure for CO2 removal at the production site.”

The Acorn project, it observed, was “still in the process of due diligence for funding, and the timeline for the final investment decision remains uncertain, introducing an element of unpredictability for potential producers in the region.”

Greener gas

But blue hydrogen is not the only answer – there is also green, produced by electrolysis of water using energy from renewables, and without the production of carbon dioxide. In May this year, plans were announced for a new hydrogen plant at Grangemouth that would “put Scotland at the forefront of the green revolution”.

This plant would be developed by German-headquartered energy firm RWE. According to the company's press release, the project will "help shape Scotland's hydrogen economy". INEOS would be the first hydrogen customer of Grangemouth Green Hydrogen.

Sopna Sury, chief operating officer at Hydrogen RWE Generation said: "This project at Grangemouth aligns with the Scottish Government’s vision for a ‘Just Transition’, putting Scotland at the forefront of the green revolution while protecting jobs and decarbonising Grangemouth.”

But these green hydrogen jobs are ulikely to come quick. The aim, it stated, is for the plant to be operational by 2029 – four years after the planned closure of the refinery.

Sustainable jet fuel

Also in the mix is the possibility that Grangemouth could become home to a biorefinery for the production of sustainable aviation fuel. It’s this that has been advocated for by Glasgow Airport boss, Andy Cliffe.

(Image: Airbus)

Currently, the Petroineos refinery produces jet fuel for Edinburgh, Glasgow, Aberdeen and Newcastle airports, and this seems an obvious possible transition given there is a mandate for the percentage of sustainable aviation fuel used in UK flights to rise to 10% by 2030.

A 2020 report by the trade body Sustainable Aviation identified Grangemouth as a key location for SAF production which could potentially support 740-1390 additional jobs.

But there are barriers to this, from a supply and sustainability perspective. Most SAF is derived from cooking oil and animal fats, and is referred to as Hydroprocessed Esters and Fatty Acids (HEFA), but the UK SAF mandate included a cap on the feedstocks used in this proces, which are limited, and which, it said “cannot deliver our long-term SAF goals alone”. There are, however, forms od SAFother feedstocks in development.

Mind the gap

Can any of these projects deliver a pathway in time for for the workers under threat? Most still look like distant dreams. The RWE hydrogen plant announcement mentioned “creating opportunities, jobs, and local economic benefits.” But the project is only at the planning application stage.

Meanwhile, the slow progress on carbon capture and storage, partly because of the delay in investment from the previous UK Government, means this is also unlikely to deliver jobs very soon. 

It's for this reason that Unite is also calling for government to support these new projects. Mr Hamilton said: "We need them to accelerate these opportunities, with government support, and while that’s happening, the refinery can continue to operate so we don’t have  gap. It’s also worth saying that whilst that achieves our objective of helping to protect jobs, it could also create new jobs with these opportunities to come."  

Transferrable skills

But do the jobs in these industries represent good matches for the refinery workforce? 

Mr Hamilton, a plant operator himself, believes they do. “I don’t see why not," he said.  "For example, whether it’s oil refining, hydrogen production or bio refining, you still need people to operate the plants. You need people to control the plants. You need them to maintain them, whether they be electricians or pipe fitters. So I see it as totally transferrable in terms of skills for the workforce there. I don’t think there’s anything I’ve come across as yet that looks like it’s a new type of job. It’s an existing job in a new setting.

“Take hydrogen for example. A by-product of a current oil refinery is hydrogen. There are obviously rules and regulations around the handling of hydrogen and we’ve got workers that work on that, and in terms of the maintenance, if you’re going to have boilers, distillation columns, pumps, whatever you’re going to use, the existing oil and gas workforce has got workers who will play a part in that going forward."   

One of the biggest cases for having these future industries at Grangemouth, he said, is the presence of a skilled workforce and associated infrastructure. 

“That’s the best scenario for a just transition. You’ve got a skilled workforce, who have got the skills that you need."

Defining a just transition 

The site's impact on the environment and climate has been well documented.  According to SEPA figures, in 2022 PetroIneos was the biggest industrial CO2 emitter in Scotland, having increased its emissions between 2021 and 2022. Meanwhile INEOS at Grangemouth  manufactures a third of the entire UK plastics, producing billions of plastic pellets each day, which some way downstream become plastic pollution.

Responding to Keir Starmer’s recent visit, Derek Thomson said: “Unite warmly welcomes the Prime Minister’s resolve to protect jobs at Grangemouth and that it is an issue of major concern for the Labour Government. Grangemouth is the nation’s foremost industrial complex and it is absolutely pivotal to our manufacturing base and energy security."

He added: "Unite is clear that investment must be unlocked to sustain the refinery's operations until any Just Transition can take place in a managed and orderly way."

“It is vital that the UK and Scottish governments along with Unite and the companies involved get urgently around the table. The stakes are high because 500 direct jobs are dependent on the oil refinery and thousands more in the supply chain. Unite’s message is simple: Keep Grangemouth Working.”

Not just jobs, but a community

What concerns Chris Hamilton most is not just the loss of jobs, but the displacement of local people and the impact on a community. It's that people will find work elsewhere. 

"It’s no uncommon to hear of opportunities," he said. " The oil and gas sector is of course an international sector. If someone wanted to leave Grangemouth today, whether that was a plant operator, an electrician or whatever, there are opportunities out there – whether it’s offshore or the Middle East or elsewhere.

"It’s not that jobs won’t be found by these people. They will because they are highly skilled. It’s about the displacement of local people. Over 70% of the workers who completed our survey were from the surrounding area. I’m from the neighbouring town three miles away from Grangemouth. I came through the apprenticeship scheme and still live here. That’s the bigger picture for me. The impact of the closure, if doomsday was to come, would be devastating for this area."