Why Scotland should learn from Spain to save fossil fuel workers from unemployment
The Scottish and UK governments need a better plan to deal with mass job losses in the North Sea oil and gas industries
Across the world, nations are ramping up investment in renewables as fossil fuels are phased out. But climate targets are being met at the expense of those dependent on the industries facing closure.
A significant portion of the European Union’s emission reductions, for instance, is coming from the decline of heavy industry, with 2030 climate targets being met “on the backs of working people”, according to the European Trade Union Confederation. This is not socially or economically sustainable and will only lead to green policymaking being perceived as an attack on industrial workers.
In Scotland we are seeing similar trends. The closure of the Grangemouth oil refinery has become a case study of the failure of the ‘just transition’ with the loss of 400 direct jobs and 2,800 more in the supply chain at risk.
400 jobs lost every fortnight?
Grangemouth is only the first part of an avalanche of job losses in the offshore industry. A report by Robert Gordon University found that, in the worst-case scenario, 400 oil and gas jobs, the same number as lost at the refinery, would go every two weeks in Scotland between now and the early 2030s.
And indeed, just last week one of the largest North Sea oil and gas contractors, Petrofac, filed for administration, putting over 2,000 jobs at risk in Scotland. This might be an energy transition, but it is nowhere near close to one that is fair for workers and communities.
READ MORE: Ex Grangemouth workers to have 'priority consideration' for green jobs under John Swinney pledge
Some countries, though, are phasing out fossil fuels in the right way. In 2020, Spain pledged to close its coal-fired power capacity by 2030. Recognising the challenges this presented to coal-dependent regions, the Spanish government designed a tender process that prioritises renewable companies which bring local investment.
The first contract was awarded to Endesa in 2022 following closure of the Teruel power plant. The company pledged to invest 1.5 billion euros (about £1.3bn) to create 14 wind and solar plants in the same town. with 60 million euros being spent on local employment and environmental initiatives like sustainable tourism.
Three subsequent contracts were provisionally awarded in 2025 following closure of the Puente Nuevo coal-fired plant in Córdoba, with a combined investment of 370 million euros into hydro and solar power as well as training for local workers, and employment for women and power plant workers.
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Using market forces
The Spanish government connected the phasing out of fossil fuels to the creation of renewable energy schemes and local jobs through a simple but powerful market-oriented mechanism: an evaluation process that scored socioeconomic impact highly. This mechanism comes at no financial cost to the government. Worker and community interests are simply prioritised in distributing funds to subsidised renewable sectors.
This process sits in stark contrast to Scotland. Out of 523 contracts awarded under the 2024 Scottish Zero Emission Bus Challenge Fund, 361 were won by overseas manufacturers, of which 287 were Chinese firms, and just 162 by Scottish firms.
One of these, Larbert-based bus manufacturer Alexander Dennis, announced jobs were at risk of redundancy a few months later. The company blamed the contract allocation process which prioritised the cheapest bids despite an “uneven playing field” that disadvantaged UK companies because of their “higher wages and better employment rights”.
Scotland and Spain are, of course, different countries with different manufacturing bases and supply chains. But the fundamental aspect remains the same: industrial closures will devastate communities if not carefully planned.
Clean Energy Jobs Plan
And if Spain is too distant an example, then lessons can be learned closer to home. The UK Government recently launched the Clean Energy Jobs Plan to generate good quality employment in the renewable sector.
As part of the plan, to access the Clean Industry Bonus, which provides funding to offshore wind developers, employers will have to commit to Fair Work Charters, which could include making payments into skills funds and allowing trade union access. Like Spain’s just transition tenders, this would not come as an expense to the government but would be a case of redistributing already earmarked funds.
A recently published report by the Just Transition Commission outlined a similar strategy for Scotland that makes access to public investment and contracts conditional on socioeconomic protections. Incorporating this advice, the Scottish Government last week announced the Grangemouth Jobs Prioritisation Scheme. Firms accessing the £25m Just Transition Fund must prioritise hiring workers made redundant by the Grangemouth refinery closure.
Though a win for Grangemouth, this is only one step along the path to real justice in the energy transition. In Spain’s just transition tender for Córdoba, "jobs for coal workers" is one of six components of the plan to address the socioeconomic impacts, along with total jobs, jobs for women, reskilling, distributed energy, and local investments.
An economically viable green transition
The approach of the Scottish and UK governments to date has been after-the-fact crisis response to industrial closures with ad hoc protections for workers. In June, Alexander Dennis announced closure of its Falkirk and Larbert sites putting 400 jobs at risk, stating competition from Chinese bus manufacturers was making operations untenable. Three months later, the Scottish Government launched a furlough scheme to protect workers until manufacturing can recommence.
Owners of the Lindsey Oil Refinery in Lincolnshire filed for insolvency in June and workers are now urging the UK Government to deploy a similar furlough scheme. In April, as a last resort to prevent closure of the Scunthorpe steel plant, the UK Government announced it would take control of British Steel.
The Scottish and UK governments are clearly capable of designing an economically viable green transition. They must work together, and with unions and industry, to ensure that jobs protection guarantees, training, and government funds are deployed as part of a proactive strategy for the phasing out of fossil fuels, the growth of investment in renewable energy and the achievement of their net-zero ambitions.
Riyoko Shibe is an energy historian at the University of Glasgow and an independent researcher for the Just Transition Commission
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