Issued by: Department for Energy Security and Net Zero, Scotland Office, and The Scottish Government

Feasibility study published today sets out nine options for Grangemouth's long term industrial future

• Next steps to secure Grangemouth’s long-term future

• Nine low carbon and renewable options for the site identified in an independent report published today

• Plans to secure private investment and a long-term partnership with business backed by £200 million from the UK Government, and £25 million from the Scottish Government

Plans to secure a long-term industrial future for Grangemouth have been stepped up as a feasibility study sets out nine options for its future.

The plan – which is backed by £200 million from the UK Government and £25 million from the Scottish Government – will support jobs, unlock investment and drive growth.

The £1.5 million feasibility study (https://scotent-uat-sdi-website.azurewebsites.net/invest-in-scotland/invest-in-projects/project-willow-grangemouth) – published today by EY – follows the recent decision by Petroineos to decommission the oil refinery.

It has identified credible long-term industrial options for the Grangemouth site and explored how it can build on its skilled workforce, local expertise and long heritage as a fuel leader in Scotland to forge a new path in low carbon energy production.

The report provides nine proposals likely to attract private investment, including plastics recycling, hydrogen production and other projects that could create up to 800 jobs by 2040, grow the economy, and deliver on both Governments’ shared ambition to secure a long term future for Grangemouth.

To kickstart the process, Energy Minister Michael Shanks and Acting Cabinet Secretary for Net Zero and Energy Gillian Martin are co-chairing a meeting this morning (Wednesday 19 March) of the Grangemouth Future Industry Board with local industry leaders, Falkirk Council, trade bodies and unions. Scottish Enterprise and the UK Government’s Office for Investment will work with Petroineos to market the proposals set out in Project Willow and seek investor interest.

It follows the Prime Minister’s announcement last month of £200 million to help unlock Grangemouth’s full potential. First Minister John Swinney also announced £25 million to establish a Grangemouth Just Transition Fund, which will support businesses and stakeholders to bring forward investible propositions over the next 12 months for the site.

Energy Minister Michael Shanks said:

"We committed to leaving no stone unturned in supporting an industrial future for Grangemouth delivering jobs and economic growth.

"This report and the £200 million investment by the UK Government demonstrates that commitment.

"We will build on Grangemouth’s expertise and industrial heritage to attract investors, secure a long-term clean energy future, and deliver on our Plan for Change."

Scottish Secretary, Ian Murray, said:

"The publication of the Project Willow report and the options it sets out marks a significant milestone in our commitment to deliver a long-term, sustainable future for the Grangemouth site which benefits the local community and the Scottish economy.

"Working alongside the Scottish Government and local partners, we remain committed to supporting the skilled workforce at Grangemouth, and are already working to attract investors for the projects outlined in this report.

"The Prime Minister recently announced a £200 million investment in Grangemouth through the National Wealth Fund which followed the £100 million Falkirk and Grangemouth Growth Deal, delivered jointly with the Scottish Government. Scotland is at the centre of our Plan for Change as we become a clean energy superpower over the next few years."

First Minister John Swinney said:

"We will leave no stone unturned in order to secure the future of the Grangemouth refinery site, and the Scottish Government has already committed or invested a total of £87 million to help do so.

"Grangemouth is home to over a century of industrial expertise and employs thousands of highly skilled workers, placing the site at a massive competitive advantage and creating a unique opportunity for investors.

"Everyone working at Grangemouth’s refinery – and in the wider industrial cluster - is a valued employee with skills that are key to Scotland’s economic and net zero future.

"This report sets out a wide range of viable alternatives for the refinery site, demonstrating that a long term, new industrial future at Grangemouth is achievable. We will continue to work closely with the UK Government to realise these opportunities and Scottish Enterprise stands ready to support inward investors looking to progress any of these technologies."

Alongside launching a search for investors, both governments have also committed to review the Project Willow policy recommendations and understand how government funding can be deployed to mature proposals from the private sector.

The £25 million Grangemouth Just Transition Fund and £200 million from the National Wealth Fund for co-investment are on top of existing investments to ensure the long-term economic future of the Grangemouth area and support the workforce. These include:

• The £100 million Falkirk and Grangemouth Growth Deal package, delivered jointly by the Scottish Government and UK Government, to support the community and its workers by investing in local energy projects to create new opportunities for growth in the region.

• Joined up support from the Scottish Government and DESNZ to provide tailored skills support for refinery workers, this includes a training guarantee for all Grangemouth refinery staff to ensure that any worker who would like skills training at the local college is supported, with funding provided by the UK Government - this will help workers into new, good jobs with local employers.

Background information

The nine projects include:

• Waste: hydrothermal upgrading (breaking down hard to recycle plastics), chemical plastics recycling, ABE biorefining (breaking down waste material)

• Bio-feedstock: breaking down Scottish timber into bioethanol, anaerobic digestion of bioresources and digestate pyrolysis, HEFA (conversion of Scottish cover crops into sustainable aviation fuel and renewable diesel using low carbon hydrogen).

• Offshore wind conduit: Replacing natural gas with hydrogen, using low carbon hydrogen to produce methanol and convert it to SAF, producing low carbon ammonia from hydrogen for shipping and chemicals.

Any National Wealth Fund investment will be subject to investible propositions and the Fund’s criteria – the proposition must deliver a positive return, drive regional and economic growth or support activity to tackle climate change, invest in key sectors, and crowd in private finance.

More information on investment opportunities can be found here (https://scotent-uat-sdi-website.azurewebsites.net/invest-in-scotland/invest-in-projects/project-willow-grangemouth), and opportunities and enquiries can be sent to grangemouth@scotent.co.uk.

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