Grangemouth Industrial Cluster - draft Just Transition plan: consultation

Executive Summary

Introduction

The Scottish Government has set ambitious targets relating to climate change and decarbonisation, including a commitment to reach net zero by 2045. To achieve this target, it is vital that the Grangemouth Industrial Cluster is able to sustainably decarbonise at pace.

The significance of the Grangemouth Industrial Cluster lies in its substantial contribution to Scotland's economy, its carbon emissions and its strategic position as a cornerstone of Scottish industry. The cluster supports thousands of jobs and is a key driver of both regional and national economic activity, particularly in the chemicals and petrochemicals sectors. It is clear that the knowledge and skill of the Grangemouth workforce will be a critical asset in Scotland's transition to net zero. Its output not only fuels domestic markets but also contributes significantly to international trade and commerce.

This executive summary provides an overview of the findings and proposals outlined in the Scottish Government's draft Just Transition Plan. It follows the structure of the our Just Transition Planning Framework, including a Baseline of findings, our Vision for the future of the industrial cluster and the proposed actions that the Grangemouth Future Industry Board will prioritise to initiate the journey to net zero.

Baseline

The Grangemouth industrial cluster baseline was developed through a series of detailed interviews with stakeholders alongside analysis of available data sets. It provides, where possible, an outline of industrial manufacturing activity and production as well as some of the wider impacts on the economy, surrounding town and people of Grangemouth.

Currently the 'Grangemouth industrial cluster' is taken to be comprised of the following core operators. However, our research has not been limited to this definition:

Key Facts

Data suggests that the Grangemouth cluster is responsible for 2.92MtCO2e or 7.2% of Scotland's total territorial emissions in 2022.

Total direct, indirect and induced GVA for the core cluster companies is estimated at £895m in 2023.

The core Grangemouth industrial cluster operators had approximately 3,250 direct employees in 2023 with a further 1,860 employed in the clusters immediate supply chain and 1,480 jobs supported through the economy through direct employee salary spend.

Most employees working at the cluster live within the immediate local area: more than half have a home address within the Falkirk local authority area (around 57%, FK1-FK6) and a further 11% in West Lothian (EH48-EH55).

The immediate workforce is predominantly male (85% of the total).

The cluster has a total annual supply chain spend of £0.82bn, including £132m the local supply chain.

Most of the major organisations operating at Grangemouth have already implemented, or are in the process of implementing, their own green targets centred around reducing emissions (where applicable). For example, across their operations, Ineos have matched the Scottish Government's target of reaching net zero by 2045 and Syngenta have committed to reducing their operational carbon emissions by 50% by 2030.

Average household weekly income in Grangemouth is £470.00 compared to £691.41 in Falkirk.

Unemployment figures in Grangemouth are at 9.1%, higher than Falkirk's rate of 8.2%. Comparatively, Scotland's national unemployment rates were estimated at 4.6% for the corresponding timeframe.

23.7% of people are employment-deprived compared to 9.3% average for Scotland.

School attendance was 69.8% in 2020 compared to a national average attendance rate of 90.2% in 2022/23.

Vision

Our vision for Grangemouth by 2045 is that of a thriving industrial cluster which has reduced carbon emissions to net zero, aiding Scotland in achieving its net zero targets.

The Grangemouth industrial cluster will become a net zero chemicals centre for Scotland and a leading production centre of the UK's low-carbon energy industry, supporting the developing biofuels and hydrogen sectors, and playing a key role in ensuring Scotland's energy security and economic prosperity.

The cluster's industrial partners will collaborate to produce advanced industrial processes, manufacturing and biofuels, which are exported globally, supporting the Scottish and UK economy. Through active collaboration with the public sector and community, the workforce will power the site; innovating, planning, building and managing the hub with respect and dignity. Grangemouth will support Scotland's circular economy that provides for equitable prosperity for current and future generations.

The development of the Grangemouth Industrial Cluster Just Transition Vision presents a clear direction towards transforming Grangemouth into a
carbon-neutral hub by 2045, focusing on five pillars: capitalising on existing industrial strengths; developing a low-carbon fuel and energy hub; becoming an important destination for carbon capture; leading in bio-manufacturing; and pioneering new industrial processes.

Getting the Just Transition right presents substantial opportunities for Scotland. By successfully decarbonising, the Grangemouth Industrial Cluster can become a global leader in sustainable manufacturing and production, attracting investment and inspiring innovation. There are opportunities to pioneer low-carbon technologies, to reskill and develop the local workforce, thus safeguarding and potentially expanding employment opportunities. Additionally, a successful transition has the possibility of enhancing community health and well-being by reducing pollution, strengthening economic links to the town, particularly through the continuation and growth of local employability, as well as contributing to global efforts against climate change.

1 Thriving industrial cluster, leveraging existing strengths

2 A low-carbon fuel and energy hub for the future

3 An industrial carbon capture point for central Scotland

4 Scotland’s central bio-manufacturing location

5 An innovative cluster leading new and advanced industrial processes and manufacturing

Summary of Proposed Actions

Despite a shared desire to transition, companies in the Grangemouth Industrial Cluster face several challenges in doing so sustainably. These include ageing infrastructure, a current dependency on high-carbon processes, the necessity for substantial investment to shift towards low-carbon technologies, and the difficultly of aligning the strategic aims of a diverse range of companies. Furthermore, firms face considerable ongoing risks related to supply chain disruptions and, adding to the challenge they face to maintain competitiveness in a global market that is increasingly valuing sustainability. Subsequently, a series of planned and co-ordinated actions are required to support achievement of the vision.

Our vision is supported by a series of Just Transition Outcomes that aim to ensure broad benefits across job creation, economic opportunities, community development, equity, environmental preservation, and adaptation are achieved as an integral component to the clusters transition. This comprehensive planning framework sets the groundwork for a fairer, greener future, embodying principles of equity, collaborative problem-solving, and iterative design.

Eight transition levers are also set out, framing areas that will unlock transition. They cover the topics of strategy and governance, sustainability, skills development, finance, innovation, supply chain optimisation, place development, and communication strategies.

Taken collectively, these outcomes and transition levers have formed the basis of a series of detailed conversations across a wide base of stakeholders, helping us to arrive at the following proposed actions.

Strategy and Governance

Develop an industry-led technical and commercial investment strategy for the Grangemouth Industrial Cluster, aligned to Scottish and UK net zero targets, that attracts investment focused on economic, social and environmental benefit.

Create alignment and coordinated action between the UK Government, Scottish Government and local authorities on policy, strategy and funding for the Grangemouth Industrial Cluster.

Sustainability and Decarbonisation

Support and fund the delivery of Project Willow as a critical early part of the longer-term industrial cluster strategy, engaging and involving companies across the cluster.

Establish a Grangemouth Regulatory Hub to support a Just Transition to net zero in 2024.

Leverage the funding available until March 2025 through the UK Government Regulators' Pioneer Fund to trial novel approaches to regulation with the aim of supporting innovation of industrial cluster to net zero whilst continuing to protect people and the environment.

Pursue additional funding routes to support a change in regulatory approach to support innovation and the Just Transition to net zero GHG emissions

Develop a series of Just Transition conditionalities, to be applied to public funding for the Grangemouth industrial cluster.

Jobs and Skills

Create a Grangemouth Industrial Skills offer in partnership with colleges, universities and standards bodies to deliver qualifications and training tailored to the needs of the transitioning economy.

Improve the co-ordination of initiatives across the Forth Valley, to ensure that the Grangemouth industrial cluster is given appropriate attention, as well as enhancing surrounding communities' access to opportunities.

Finance

Secure UK Government and Scottish Government funding for Project Willow and other early-stage scoping studies to underpin the long-term Grangemouth Industrial Cluster Strategy.

Develop and proactively promote a comprehensive and attractive investment proposition for the Grangemouth Industrial Cluster to attract private sector investment.

Maximise the value of existing government funding e.g., Green Freeport, Falkirk and Grangemouth Growth Deal, Stirling and Clackmannanshire City Region Deal, to ensure that the cluster is given required attention.

Place

Significantly increase the visibility, pace and ambition of the Greener Grangemouth Programme with a clear plan of realistic actions that deliver positive impact, build confidence and create momentum.

Define and deliver a focused, time-bound study to develop a plan to improve public transport links, connectivity and accessibility around the Grangemouth Industrial Cluster.

Develop a place-based Just Transition Deal.

Define and establish best practice community engagement guidelines for partners in the Cluster Strategy, to deliver a consistent approach to community empowerment in decision-making.

Fund a recognised Community Engagement and Participation Manager, who will act as the local community champion, who will engage with communities and local leaders and influencers to raise awareness and empower the community.

Explore the development of a local Procurement Framework that encourages and incentivises operating companies to procure goods and services from local companies, working to enhance community wealth building.

Supply Chain Ecosystem

Establish a supplier development programme backed by UK and Scottish governments and their agencies to build the capacity of SMEs to participate in the green economy.

Create an annual Grangemouth Industrial Decarbonisation Expo held in Forth Valley, bringing together local, national and international companies to share knowledge, technologies and solutions.

Harness the coordinated support of trade bodies and other supply chain support organisations by creating a specific campaign to promote the cluster strategy and opportunities at Grangemouth.

Communication

In line with the Grangemouth Industrial Cluster Strategy, develop a distinctive brand identity and narrative to position the cluster with key audiences and stakeholders.

Develop and resource the delivery of a communication and marketing programme to promote the cluster – its ambition, goals, commercial opportunities, impact and benefits.