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Prime Minister Sir Keir Starmer has announced a £200 million investment to reshape Grangemouth’s industrial future, positioning the site as a potential clean energy powerhouse. Speaking at Scottish Labour’s conference in Glasgow, Starmer emphasized that this funding represents a strategic commitment to both economic renewal and energy security in Scotland.
Currently owned by Petroineos, the Grangemouth oil refinery is set to close by summer 2024, resulting in over 400 job losses. The facility, which has struggled with massive financial losses, will transition into an import terminal, retaining only 65 of its 500 refinery jobs.
This funding, drawn from the National Wealth Fund, will repurpose Grangemouth’s industrial base, paving the way for developing bioengineering, biofuels, and hydrogen energy.
He told the conference: "We will grasp the opportunities at Grangemouth, work alongside partners to develop viable proposals, team up with business to get new industries off the ground.
"And to attract private investors into the partnership we need, we will allocate £200m from the National Wealth Fund, for investment in Grangemouth, investment in Scotland's industrial future.
"That is the difference a Labour government can make."
Government and Industry Backing for a Just Transition
Scotland’s First Minister, John Swinney, had previously announced £25 million in funding to support a “just transition” for workers, urging Westminster to match the commitment. Project Willow, a £1.5 million feasibility study, is also underway to explore low-carbon alternatives, including plastics recycling, hydrogen production, and sustainable aviation fuel (SAF). As part of the transition package, the UK government has pledged:
£10 million for skills and training, ensuring refinery workers can upskill for new roles.
National insurance relief for businesses in the Grangemouth Freeport area that hire displaced employees.
A £100 million growth deal, jointly backed by the Scottish and UK governments, to drive economic diversification in the region.
Unite, the refinery’s sole union, has welcomed the investment but warned that the "devil is in the detail." The union has strongly advocated for transitioning the site into a production hub for SAF, seeing it as a critical opportunity to secure long-term employment and establish Scotland as a leader in clean fuels.
General Secretary Sharon Graham acknowledged the funding as "welcome news" but stressed that this was only the beginning of ensuring Grangemouth’s viability for future generations.
She said, "This needs to be the start, not the end, of delivering a real workers' transition for Grangemouth.
"It is essential that all stakeholders come together to put the meat on the bones and that this investment counts for jobs and our security. Clear timescales will be important as well as details on jobs."
Roz Foyer, general secretary of the Scottish Trades Union Congress (STUC), said securing the jobs and futures of the workforce "must be the priority".
She added: "This announcement cannot be dismissed lightly. However, this funding will only have a transformative impact if used correctly and is accompanied by even further investment from both governments."
Iain Hardie of Petroineos said: "The prime minister's commitment to Project Willow is very welcome and reflects the quality of the work done in the initial phase of the project.
"We look forward to continuing to support both governments in the next phase as the project develops to bring together a collation of parties interested in the development of a new low-carbon future for Scotland's largest industrial cluster."
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