£25m funding for Grangemouth's 'green future' welcomed by Falkirk Council

First Minister John Swinney made the announcement in Holyrood yesterday (Tuesday) before calling on the UK government to match the cash to push forward green energy plans for the site.

The funding package comes one week after workers at the Petroineos refinery began receiving redundancy letters with the plant due to close later this year.

Only around 65 jobs from 500 are expected to be retained.

The First Minister said the redundancies were a “matter of deep regret”, adding he would make the Grangemouth just transition fund available in next year’s budget, set to be agreed by MSPs next week.

He said the government's budget would be amended to redirect funds raised by leasing the seabed around Scotland to wind farm developers.

Politicians have claimed the decision to close the facility, which was shedding money for Ineos and Chinese state-owned PetraChina in a joint venture, had come too soon. Mr Swinney told MSPs the closure had been “premature”.

Project Willow, co-funded by the UK and Scottish governments, is due to report back by the end of the month on options to be taken forward at the site.

Both governments have already committed £100 million to a growth deal for the Falkirk and Grangemouth areas, but that was before last year’s blow that Scotland’s only refinery was being closed.

Speaking in Holyrood on Tuesday, the First Minister said: “That funding, derived from the proceeds of the ScotWind process, will be available immediately in the new financial year to support businesses and stakeholders to bring forward investible propositions over the next 12 months and, if necessary, beyond.

“The aim is to expedite any of the potential solutions that will be set out in the Project Willow report, as well as other proposals that will give Grangemouth a secure and sustainable future.

“Any redundancy, whether voluntary or compulsory, is a matter of deep regret.

“That is particularly so given that this government believes that refining at Grangemouth should continue, that this closure is premature, and that it is detrimental to Scotland’s transition to net zero.”

Mr Swinney added: “Through the Grangemouth Future Industries Board, we will work with the local authority, businesses and the unions to explore and accelerate projects and proposals that support this ambition.

“Through Project Willow, we have the foundations of a strong evidence base for future investment in technologies such as plastics recycling, hydrogen production and the development of sustainable aviation fuel.”

Mr Swinney also reiterated his demands for the UK government to finally confirm the green light for Scotland’s carbon capture and storage strategy, the Acorn project, which could be crucial for hydrogen production at Grangemouth.

He called on Labour ministers to make “urgent progress on allocating funding for the second round of hydrogen production projects”.

Mr Swinney said: “Scotland and indeed Grangemouth is well placed to lead on the production of green hydrogen and I know that a number of Scottish businesses submitted funding proposals to the UK government’s hydrogen allocation round, which closed last April – nearly a year ago.

“These businesses are still awaiting a UK government decision on shortlisting. We need immediate progress on this.”

The First Minister has called on the UK government to “at least match our funding commitment to deliver a just transition fund for Grangemouth”.

In response, Labour Scottish Secretary Ian Murray claimed the £25 million of funding was only “made possible by Labour’s austerity-ending budget, which delivered £4.9 billion extra for the Scottish Budget”.

He said: “We will consider the announcement today in detail, and set out our own next steps in due course.

“Project Willow, a jointly-funded study looking at a long-term sustainable future for the site, was commissioned within days of Labour taking office. It could have been commissioned months beforehand, but only got the green light after Labour won the election.”

Following the announcement of the cash, Councillor Cecil Meiklejohn, leader of Falkirk Council, said: “This funding will certainly help those affected by job losses to access training, develop new skills, and find alternative employment. It will also support investment in projects that could create new job opportunities in areas such as hydrogen production, plastics recycling, and sustainable industries.

“Ensuring that local people and businesses can be part of this transition is vital for the long-term prosperity of our area."

She added: “We know this is an uncertain time for many people, and we want to reassure our communities that we will continue to work closely with government and industry to explore all opportunities for investment and job creation in the area.

"Grangemouth has the skills, expertise, and potential to play a key role in Scotland’s industrial future, and we will do everything we can to support that ambition.

“The Council will continue working with the Scottish Government, UK Government, and local partners to ensure that Grangemouth remains an important hub for industry and jobs.

"Supporting our communities through this period of change is a priority, and we will do all we can to help those affected but look forward to embracing new opportunities presented by this announcement.”

A Petroineos spokesman said: “The first phase of Project Willow is now complete and has set out clearly for governments at Holyrood and Westminster the scale and nature of the low- carbon manufacturing opportunities that could be pursued at Grangemouth.

“It is an enticing blueprint, but it will only become more than that through a series of enabling actions by both governments, in the shape of policy and financial support.”