Swinney pledges £25m for Grangemouth site

The Scottish government is to commit £25m to establish a "just transition" fund for Grangemouth.

The refinery, owned by Petroineos, is set to close by the summer with the loss of more than 400 jobs.

"Constructive" talks took place between the UK and Scottish governments on Monday, according to First Minister John Swinney. He challenged UK ministers to match the funding he announced.

The two governments have already jointly committed £100m to a growth deal for the Falkirk and Grangemouth area.

Swinney announced the new funding in a statement to the Scottish Parliament on Tuesday.

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

He said any redundancy was a "matter of deep regret", adding: "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."

A careers fair will take place on 6 March, he said, with 19 companies taking part.

He said the additional £25m for the Grangemouth just transition fund would take the Scottish government's total investment for the site to £87m.

This new money will expedite any proposals which come from Project Willow, which is examining other industries which could exist on the site such as plastics recycling, hydrogen production and sustainable aviation fuel.

Swinney said collaboration with the UK Energy Secretary Ed Miliband would continue, but he urged the UK government to at least match the Scottish government's just transition fund.

The first minister said: "We need the UK government to do at least the same and deliver a fair amount to avoid significant economic disruption in central Scotland, and to protect and promote Scotland and Grangemouth's future interests.

"In short, we need this Labour government to do what it said it would do before the election."

The UK government's recent growth deal money does not recognise the urgency of the situation, he said.

The UK government's Scottish Secretary Ian Murray Labour would consider the announcement and set out steps in due course.

He said: "When Labour came to office last year, there were no plans for Grangemouth. Within days the UK Labour government approached the Scottish government to put together a package of measures.

"This included £100m for the Falkirk and Grangemouth growth deal, which will deliver more than £628m in economic benefits and create 1,660 jobs.

"The UK Labour government is also putting £26m into the Forth Green Freeport, with Grangemouth at its heart, to attract investment and well paid, quality jobs to the area."

Murray added that Project Willow had been commissioned within days of the UK Labour government taking office last summer.

He concluded: "At every step of the way it has been Labour that has driven a sense of urgency to Grangemouth."

Earlier this month, redundancy letters were sent out to staff at the oil refinery owned by Petroineos - with some 65 of around 500 jobs expected to be retained.

It was announced last year that the central Scotland facility would close and transition to become an import terminal, as Petroineos reported massive losses at the refinery.

A £1.5m report into the feasibility of Grangemouth becoming a low-carbon energy hub, known as Project Willow, is due to be published by the end of the month.

Scottish Labour leader Anas Sarwar said he and the first minister shared a "deep frustration" with Petroineos over its decision to close the refinery, despite attempts to keep it open.

But he added: "Governments have known of the company's intentions for five years but failed to put plans in place.

"But over the past seven months the UK and Scottish governments have worked collaboratively to deliver the Falkirk and Grangemouth Growth Deal, joint working on Project Willow and joint attempts to secure incomes for workers for the next 18 months."

Scottish Conservative leader Russell Findlay MSP said Grangemouth was vital for the country's energy security.

He accused the SNP and Labour of being hostile towards oil and gas, adding: "While we welcome the additional funding that has been announced today, John Swinney needs to accept responsibility for the SNP's anti-oil and gas stance, and its role in Grangemouth's demise.

"It's just common sense that, while we still need oil and gas, we should be producing it in Scotland rather than relying on costly imports."

Michelle Thomson, the SNP MSP for Falkirk East - which includes the Grangemouth refinery - warned the refinery's closure could have a devastating impact on the area.

STUC general secretary Roz Foyer said: "This is not insignificant funding from the Scottish government, but for the workers who face redundancy in the coming months, it is still too little too late.

"The Scottish and UK governments have known for months if not years that workers are facing redundancy. Political inaction has let them and their families badly down."

A spokesman for Petroineos 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 it will only become more than that through a series of enabling actions by both governments, in the shape of policy and financial support."