The Prime Minister has unveiled a £200 million investment for Grangemouth, Scotland, ahead of the shutdown of the region’s last operational oil refinery. Speaking at the Scottish Labour conference, Sir Keir Starmer emphasized that this funding, sourced from the National Wealth Fund, represents a strategic “investment in Scotland’s industrial future.” The announcement comes as Grangemouth Oil Refinery, situated on the banks of the Firth of Forth, prepares to cease operations this summer. The refinery, which has been a cornerstone of Scotland’s energy sector, will transition into an import terminal, significantly reducing its workforce and leaving 400 workers facing redundancy. Sir Keir underscored the importance of seizing opportunities at the site, collaborating with partners to develop viable proposals, and working with businesses to establish new industries and attract private investors.
The £200 million allocation is in addition to an existing £100 million “growth plan” already in place for the area, signaling a concerted effort to revitalise the region’s economic prospects. Scotland’s First Minister, John Swinney of the SNP, welcomed the announcement, highlighting the necessity of Scottish and UK governments collaborating to secure a sustainable future for the workforce. This cross-party support reflects the shared recognition of Grangemouth’s strategic importance and the need for a unified approach to address the challenges and opportunities arising from the refinery’s closure.
Sir Keir Starmer also revealed that the new investment is intended to catalyse a partnership with the private sector, with the government anticipating that private investors will contribute three times the amount of public funding. This ambitious expectation underscores the confidence in Grangemouth’s potential to become a hub for new industries and clean energy initiatives. The Prime Minister framed the transition to clean energy as a “golden opportunity for Britain, especially for Scotland,” while acknowledging the ongoing importance of oil and gas for national security. He emphasized that these industries will remain integral to Scotland’s future for decades to come, even as the country embraces renewable energy sources.
In addition to the financial investment, Sir Keir announced a comprehensive support package for the 400 workers set to lose their jobs. Each redundant employee will receive 18 months of full pay, along with access to a skills and training program backed by up to £10 million. This initiative aims to equip workers with the skills needed to transition into new roles within emerging industries. Furthermore, businesses in Grangemouth that hire these workers will benefit from National Insurance relief, creating a financial incentive for local employers to support the workforce during this period of change.
The closure of Grangemouth Oil Refinery was announced by Petroineos, its operator, in September 2023. The company cited an inability to compete with refineries in Asia, Africa, and the Middle East, where operational costs are lower. At the time of the announcement, the refinery was losing approximately £395,000 per day and was projected to incur losses of around £153 million for the year. Petroineos has plans to repurpose the site as an import terminal, which will primarily handle the distribution of petrol, diesel, aviation fuel, and kerosene. However, this transition will require a significantly reduced workforce, with only a handful of employees needed to manage the terminal.
Union leaders had initially hoped that the refinery might remain operational for a longer period, allowing time for the development of a green alternative at the site. However, Petroineos has maintained that the closure is necessary to safeguard Scotland’s fuel supply in the long term. The conversion of the refinery into an import terminal is expected to ensure energy security while paving the way for future investments in cleaner energy technologies. The £200 million investment from the National Wealth Fund, combined with the existing growth plan, represents a significant step toward reimagining Grangemouth as a hub for sustainable industries and creating new opportunities for the local community.
