Call for talks on Grangemouth's future: letter to UK Government

From: Neil Gray, Cabinet Secretary for Wellbeing Economy, Fair Work and Energy
To: Claire Coutinho, Secretary of State for Energy Security and Net Zero 

Dear Claire,

I am writing to you following Petroineos’ announcement that it plans to commence preparatory work to enable the construction of import terminal infrastructure at Grangemouth, with a view to continue refining at Grangemouth until “Spring 2025”. This announcement has generated a great deal of interest in Grangemouth and across Scotland and, given that the UK Government has competency for security of fuel supplies, it is right that you and I liaise closely in the wake of this announcement.

The Grangemouth refinery is a strategically important asset both for Scotland and for the United Kingdom. Its critical role in maintaining security of fuel supplies across Scotland (also serving markets in North of England and Northern Ireland) must be safeguarded. I am in no doubt that you will be considering the impact that this announcement will have on long term energy resilience from Grangemouth, as well as the impact the asset’s future transition will have on employment at Grangemouth.

You will be aware of our continued engagement with Petroineos shareholders regarding the position of the Grangemouth refinery business – and of the shared working and collaboration between our respective officials on this matter over the past couple of years.  I continue to meet with Petroineos Joint Venture parties, PetroChina and INEOS, regarding the future of the refinery and the future low carbon projects which are at the early stage of their project development. Indeed, the First Minister and I met the refinery business this morning to outline our concerns about the impact of this announcement on employment and wider economic development.

Following our meeting with Petroineos this morning, I wrote to Petroineos Trading CEO, Franck Demay, to seek assurances from him that the business will ensure that Grangemouth’s role as a source of domestic road and air fuels will continue for years to come.

Though the refinery business has made no firm decision on the exact timeline as to when the asset will transition, it remains my firm preference that the refinery should continue operating for as long as possible. Not only would this enhance Scotland’s fuel resilience, it would provide critical time and space for the business to bring forward new transition opportunities across Grangemouth, and ensure that jobs are protected.

It is a priority for the Scottish Government to support a Just Transition to Net Zero for the Grangemouth cluster, safeguarding the high-value employment concentrated there: an objective which I believe you will share. The Scottish Government has been engaging constructively with the business around the feasibility of phasing in a new bio-fuels refinery at Grangemouth and it is my understanding that the proposed infrastructure at Grangemouth and Finnart would enable the importation of sufficient quantities of bio-feedstocks into Grangemouth for use at the mooted bio-refinery, as well as road and air fuels. I do hope we can work together to identify routes to expedite this project.

In light of Petroineos announcement and the issues I have outlined in this letter,  I believe it would be beneficial to meet in the coming days to discuss our shared and respective responsibilities and priorities for the refinery. I would also welcome the opportunity to receive an update from you on the action you are taking to ensure fuel resilience in Scotland is safeguarded under all scenarios; and any support you may provide to those working at the site. If you are agreeable, my officials will liaise with your Private Office to identify a mutually convenient slot for this meeting.