Grangemouth Industrial Cluster - draft Just Transition plan: consultation

Annex A – Detailed Baseline

Manufacturing Activity Analysis

Given the current lack of integration across industrial operations, the cluster can be defined by core operations on-site and relationships between different companies. The cluster encompasses a range of manufacturing processes, across a number of industrial sectors, showing a diverse and complex ecosystem, producing a variety of important products. A visualisation of these processes can be seen on page 19 of the main document.

Analysis of the manufacturing processes at Grangemouth has highlighted that:

• There is very little intra-cluster dependency on feedstocks or unit operations across the Grangemouth cluster.
• Where this does exist, it usually confined within existing sub-clusters and is based on energy demand. There are multiple major operators at Grangemouth that rely on their relationship with other companies for their access energy needs.
• The proximity to the Port is a strategic asset, as many operators rely on their facilities for feedstock import and product export. There is a further benefits to Grangemouth's physical location, namely access to road infrastructure and significant access to weight bearing land.
• It is also worth noting that Forth Ports offers intermodal rail services for Scottish exports including chemicals, spirits and fresh food. Due to recent upgrades to the rail freight hub can handle dual rail siding of 775 meters (up from 200 meters), meaning it can service the longest freight trains used in the UK. The upgrades also mean there is possibility to move goods down from Aberdeen. To fully exploit the benefit of these upgrades, Network Rail is planning work addressing gauge clearance issues which currently affect this route.

Energy Consumption

Grangemouth cluster is supplied by connection to both the national Gas grid and Electricity networks as well as bespoke on site energy generation

Beyond this, the three entities within the INEOS ecosystem have the majority of their energy needs met by the Grangemouth CHP plant and Ineos Infrastructure (Grangemouth) Ltd, which provides electricity, steam and air conditioning.

A number of large operators at Grangemouth are dependent on CalaChem for their utilities, who receives natural gas from the Scottish Gas Network. In the near future, companies receiving energy utilities through CalaChem will benefit from Earls Gate Energy Centre. There are plans at Earls Gate Energy Centre to generate power from Refuse Derived Fuel. This renewable fuel (as classified by the Scottish Government and EU) will be produced by an energy from waste process, essentially acting as a CHP. The replacement of the old gas fired plant has the potential to prevent approximately 210,000 tonnes of waste going to landfill each year.

Net Zero Strategies

The majority of the large industrial operators at Grangemouth have set net zero or carbon reduction targets in line with Scottish Government's target of being a net zero nation by 2045. Several large operators see the current decade as an opportunity to reduce their carbon/GHG output by at least 50% or being carbon neutral by the early 2030s.

Net zero strategies for industrial operators are often set at a company wide level, meaning that plans are not tailored for the specific context of Grangemouth. They are sometimes attached to health and safety plans which are not designed to provide further benefits to the local economy or community. However, a number operators are investing significant capital into Grangemouth specific sustainability strategies which have the potential to create direct employment as well as create more jobs in the supply chain due to demand.

An example of the this is the private-public partnership resulting in the Forth Green Freeport deal. The project includes Grangemouth one of three locations which will benefit from Freeport status. This allows companies a more focused approach in net zero-related activities, by innovating and investing in Grangemouth specific solutions which will allow the companies in the regions to reduce their emissions. This programme goes beyond simply reducing emissions. By working together, public and private partners will have agreed to direct a skills development programme (Skills Accelerator Fund) aimed at young people from deprived communities, which will benefit community as well as business by working together. As result of this partnership, it is possible to derive further benefits, such as funding courses through local education providers, to community. At the same time, it gives local companies access to skilled workers, by being partially guided by industry workers will be able to fulfil skill demands.

Across industrial operations, including in Grangemouth, there is a need for auxiliary utilities providers and the energy grid to invest into decarbonisation and renewable energy infrastructure,
so that they may decarbonise too. This is not limited to small and medium industrial operators. Not all large-scale, multi-national operators operate their own energy plants, choosing to rely on already established operators, or joining to the grid (depending on availability and their own energy needs).

Fuel switching projects, to renewable and low-carbon energy sources, have the potential to unlock a pathway to help operators at Grangemouth reach their net zero and carbon reduction goals. These decarbonisation benefits could come from hydrogen infrastructure built specifically to service operators in Grangemouth, and connections to the grid when providers in the wider industry fuel switch. Access to low-carbon electricity is a potential barrier to decarbonising the Grangemouth industrial cluster. Further investigation is required to determine what interventions can be made to mitigate electricity grid constraints and accelerate the deployment of low-carbon technology.

There is further potential for Grangemouth operators to decarbonise through CCUS, as Grangemouth is planned to be connected to the ACORN Transportation and Storage system, designed to store industrial CO2 emissions in under the seabed via decommissioned oil and gas infrastructure.

Despite a shared desire to transition, companies in the Grangemouth Industrial Cluster face several challenges in doing so sustainably. These include aging 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.