The Future of Grangemouth: A Green Energy Transformation

The history of Grangemouth has been built on fossil fuels – but now its future depends on its reinvention as Scotland's green energy industrial hub. The site, on the south bank of the Firth of Forth, is home to the UK's oldest oil refinery, which dates back to 1924. It is being closed down by owner Petroineos, with the loss of 400 of the 2,000 jobs which are based at the sprawling industrial complex. The Scottish and UK governments have funded a report - known as Project Willow - into the options for the site, which has now been published. It says Grangemouth must switch to green energy to meet its vast need for power, and then use that to produce new sustainable products.

The site already has many built-in benefits. The location couldn't be better. It sits on a sheltered port which already receives weekly shipments of shale gas from the US. Since output from the North Sea peaked in 1999, the supply of local gas has fallen dramatically and the replacement shale gas began arriving from Pennsylvania in 2016. Grangemouth is also central and incredibly well connected, with electricity pylons fanning out in all directions and underground pipelines linking it to the north east of Scotland and northern England. Some of those oil and gas pipelines are under-used and could be repurposed to carry greener fuels like hydrogen or exhaust gases for disposal. One just transition campaigner - who wants to ensure people and communities are treated fairly during the change away from fossil fuels - told me that if you were looking for the ideal place to set up these new green industries, you would choose Grangemouth.

Current Industry and Challenges

With the refinery closing, the main industry at the plant is now the production of chemicals like ethylene, polyethylene and polypropylene, which are components in the manufacture of plastics. These are then used for a whole range of applications, from making PPE to cabling, building materials and dyes. But this is incredibly energy-intensive, making Grangemouth the most polluting site in Scotland. The cluster of business there were responsible for 7.2% of Scotland's emissions in 2022, according to the Just Transition Commission. Prioritising a carbon capture and storage scheme - called the Acorn Project - is seen as a vital step in reducing Grangemouth's carbon footprint. It would catch planet-warming gases before they enter the atmosphere, pipe them underground to St Fergus in Aberdeenshire and store them in depleted oil and gas wells under the North Sea. But the project missed out on the first round of UK government support and campaigners want a clear signal that it will be given full backing by ministers.

Future Opportunities and Plans

One thing that is definitely going to be created at Grangemouth is a new import terminal to replace the closing refinery. That would mean the procession of tankers which deliver aviation fuel to Edinburgh Airport can be maintained. In the longer-term, a facility creating sustainable aviation fuel could use some of the skills of the existing workforce. It is on the political agenda. Since January, the UK government has mandated that 2% of UK jet fuel has to come from renewable sources - which means alternatives to fossil fuels. This will increase to 10% by the end of the decade. But there's been no commitment that Grangemouth will be the source of some of that fuel. The other potential options include a "biorefinery" which could use waste whisky and food in chemical production processes to reduce reliance on fossil fuels.

Advanced recycling methods could also be developed which would produce high quality plastics able to be used in food packaging and health care. That would involve a process called "cracking" which breaks down the products into smaller molecules. It's a technique which is already carried out on fossil-fuel based chemicals at the Ineos site. Hydrogen will also play an increasingly important role in our economy over the coming decades as a clean energy, particularly in heavy transport and industry. Scotland's abundance of wind means generating green hydrogen from electricity has huge potential. Some hydrogen is already made at Grangemouth, and plans have previously been announced to significantly increase production by 2030. That hydrogen would then be used to displace gas to generate high temperatures in industrial processes.

Hydrogen Storage Challenges

Grangemouth, however, does not currently have the right conditions to store hydrogen in significant quantities. Large underground salt caverns are ideal - but the nearest potential sites are in East Yorkshire and Cheshire. So either expensive storage units would have to be built above ground near Grangemouth, or the hydrogen would have to be piped hundreds of miles. The Project Willow report identifies nine proposals - including plastics recycling and hydrogen production - which it says are likely to attract private investment. It predicts they could create up to 800 jobs by 2040. The plans are backed by £200m from the UK government and £25m from the Scottish government. That will not be the end of the matter; in fact, it's barely the beginning. Attracting the public and private investment will be far more challenging than outlining the options. But talking about it early - and in a co-ordinated way - will surely maximise the chances of securing a long-term future for a site so intrinsically linked with fossil fuels.