Governments working together to save Grangemouth – Ian Murray

The Scottish secretary has promised that UK and Scottish government ministers will adopt a “one-team approach” to securing a future for Grangemouth oil refinery.

Around £1.5m of funding, paid for by both governments, has been allocated to producing a report exploring options for the site.

Ministers want to consider longer-term opportunities for Grangemouth that involve low carbon industries.

Owner Petroineos announced it intends to cease refinery operations by 2025, putting 400 jobs at risk.

Speaking to BBC Scotland News, Scottish Secretary Ian Murray said that the UK government was “fully committed” to the future of the site, and that governments in London and Edinburgh had been working “hand in glove”.

He said: “It’s an incredibly exciting proposal, it gives a big commitment from both governments that we are committed to the long term future of Grangemouth.

“The workforce can be assured that both governments are working in partnership hand in hand to make sure we can get there.

“It sends out a very clear message that both governments are working together in the interests of the people in Scotland.”

Mr Murray has recently said he believes the Grangemouth site could become a “bio plant” for greener industries, such as sustainable aviation fuel.

The UK government Energy Secretary Ed Miliband and the Scottish government’s acting Energy Secretary Gillian Martin will also co-chair a working group tasked with looking at the future of the plant.

Mr Miliband said: “The UK government will leave no stone unturned in seeking a future for the Grangemouth site and its workers.

“We are committed to boosting growth through an industrial strategy, and to engaging with the workers and communities of Grangemouth and the Scottish government.”

Mr Murray added that Mr Miliband was in “constant discussion” with Petroineos about short-term issues at the plant.

Ms Martin added: “The Scottish government wishes refining at Grangemouth to continue for as long as practicable and recognises that the site, and its workforce, are crucial to Scotland’s economy and our transition to net zero.

“We are committed to working collaboratively with Petroineos, UK government ministers and Unite the Union to explore the options available to secure a long term, sustainable future for the site and accelerate new employment opportunities.

It is understood that each government has invested £800,000 into producing the report.

Mr Murray would not say if Grangemouth could be the base of the publicly-owned energy company GB Energy, but said that the government would announce a location “fairly shortly”.

Grangemouth oil refinery near Falkirk is home to one of the first oil refineries in the UK, which is still a major supplier of aviation and ground fuels across Scotland

Oil operations at the site can be traced back to 1919. The refinery, established in 1924, was one of the first crude oil refineries in the UK.

Grangemouth was run by Innovene until 2005. Ineos – owned by one of Britain’s richest men Jim Ratcliffe – bought Innovene in a £5bn takeover.

In 2019 plans were announced to build a £350m energy plant at the site, as part of a £1bn investments in the UK oil and chemical industries.

But in 2023, owners Petroineos announced they intend to turn the site into a fuels import terminal due to “global market pressure”.

Only 100 staff would be needed for the planned import terminal.

About 2,000 people are directly employed at Grangemouth including 500 at the refinery, 450 on the Forties pipeline from the North Sea and a further 1,000 in the Ineos petrochemicals business – meaning the change in operations would put 400 jobs at risk.