Petroineos (Discussions)

Portfolio Question Time – in the Scottish Parliament at on 1 May 2024.

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Photo of Daniel Johnson Daniel Johnson Labour

To ask the Scottish Government whether it will provide an update on what discussions it has had with Petroineos and trades unions about refining capacity at Grangemouth. (S6O-03360)

Photo of Gillian Martin Gillian Martin Scottish National Party

The Scottish Government continues to engage extensively with Petroineos. I most recently met the chief executive officers of Petroineos on 27 March, when I made clear the Scottish Government’s commitment to continue to engage constructively with the business. Petroineos and trade unions are also members of the Grangemouth future industry board just transition leadership forum, which I convened on 28 March.

Ministers met Unite the union and the Scottish Trades Union Congress on the morning of the import terminal announcement. Outwith the Grangemouth future industry board, I met unions in Falkirk on 15 March at a Just Transition Commission round-table meeting, which included representation from the wider Grangemouth community, Petroineos, unions and the local authority. I will next meet Unite in June to further discuss this very important matter.

Photo of Daniel Johnson Daniel Johnson Labour

I thank the Minister for that detailed answer.

Here is what we know: the most recent accounts from Petroineos show that the site is profitable, and it has now secured investment in the hydrocracker, which was previously seen to be critical, but the plan to stop refining in 2025 is still in place.

What is the minister’s understanding of what factors motivate the commitment to disinvestment? Has she discussed those matters directly with PetroChina, given that the Government has met it and it is bankrolling much of this, or, indeed, any other potential investors? Most critically, is the Government’s objective to secure refining at Grangemouth beyond 2025 or simply to mitigate the effects of decisions that are being made elsewhere?

Photo of Gillian Martin Gillian Martin Scottish National Party

Mr Johnson has raised really important points. I have to point to the fact that Petroineos is making commercial decisions, and it has actually outlined them. It would not be fair to air in public what those commercial decisions have been based on because that is confidential.

One of the key aims of the Scottish Government, working in partnership with the United Kingdom Government and, indeed, the wider Grangemouth community, is to see how we can secure the refinery for the future. We are keen to look at whether it could become a biorefinery, and we are looking at ways in which we can influence the UK Government to bring down the hydroprocessed esters and fatty acids—HEFA—cap so that it could be one of the first movers in sustainable aviation fuel. That is one of the areas in which there are real opportunities for the refinery. Our colleagues at Petroineos agree with that, and we are working towards it.

Photo of Evelyn Tweed Evelyn Tweed Scottish National Party

Can the Minister provide further information on how plans to develop a specific just transition plan for the Grangemouth industrial cluster will help to secure a long-term, sustainable future for the area?

Photo of Gillian Martin Gillian Martin Scottish National Party

Our just transition plan for the Grangemouth industrial cluster will outline a first-of-its-kind vision for the site and will include the long-term net zero operations that we would hope to see take place by 2045, some of which I spoke about in my answer to Daniel Johnson’s question. Beyond that, our plan will chart a series of actions that seek to secure that by focusing on securing long-term investment and developing technical and commercially viable solutions for manufacturing.

The necessary policy development as well as the skills and place-based activity that will be required to support a prosperous net zero future for the area are being developed with those who work in Grangemouth, communities, local employers, local authorities, unions and many other stakeholders.

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