Exclusive:Inside Project Willow: How trees, waste and wind will transform Grangemouth

Nine manufacturing processes have been drawn up in Project Willow, jointly funded by Scotland’s two governments, that will mean no crude oil is put into the manufacturing hub - with new and innovative fuels, processes and products generated.

An official update on Project Willow is due by the end of the month, which will focus around three manufacturing streams - producing bio fuels, potentially from trees, harnessing energy from waste and using Grangemouth as a conduit for Scottish wind.

Reports have suggested the nine projects will require hundreds of millions of pounds of government funding.

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But it will require much more than just money from governments to get the plans off the ground. The UK and Scottish governments will be required to change regulation and policy, not just contained to energy and industry.

If Project Willow is to succeed as hoped, changes will also be needed to forestry, waste and agricultural policies.

READ MORE: Grangemouth refinery closure to hit 2,800 jobs as 'hammer blow' decision a 'significant economic shock'

Grangemouth is no stranger to transformation, having originally been established at the former Forth-Clyde canal in the 1700s when grain and timber were imported and coal exported. Oil began being imported into Grangemouth by 1914 before the refinery opened ten years later.

Anger has been thrown at Petroineos over the decision to shut down Scotland’s only remaining refinery despite the facility losing the company £385,000 a day. Despite a feared 400 redundancies, it is understood only a handful of compulsory redundancies have been made.

Politicians have claimed the decision to close the plant came out of the blue, but Petroineos bosses have been raising the prospect of a closure for at least five years with government ministers.

But the closure of the refinery has acted as a burning platform that has grasped the attention of both of Scotland’s governments to finally establish a future plan for Grangemouth.

Two days after Sir Keir Starmer entered Downing Street in June last year, in a meeting with First Minister John Swinney at Bute House, the future of Grangemouth was top of the shared agenda.

After pressure from Ineos and Petoineos, Scotland’s two governments agreed to put forward £750,000 each to commission consultants Earnest and Young to draw up a report on Project Willow.

It is understood the Labour UK government’s national wealth fund will invest in the projects contained in Project Willow, with Grangemouth chiefs activated to come up with viable propositions.

It is feared that if Project Willow and Grangemouth’s future falls flat, it will likely put the net zero ambitions of both Scotland and the UK and risk of failure.

Speaking to The Scotsman, Iain Hardie, regional head of legal and external affairs at Petroineos, said: "If low-carbon manufacturing made commercial sense today, industry would already be doing it.

“As things stand, the necessary regulatory, fiscal and economic incentives aren't there to support it."

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He added: "Willow has identified several realistic low-carbon pathways for Grangemouth, with the potential to reinvigorate the existing industrial base over time.

“Something really exciting could be done here, but it can only be unlocked by a series of government actions, through both policy and financial support."

Ineos and Petroineos have been left, understandably, frustrated by a false narrative that Grangemouth is closing down.

Colin Pritchard, sustainability and external Relations director at Ineos, insisted “Grangemouth is not closing”.

He said: “The refinery is transitioning to an import terminal, but Ineos Olefins and Polymers UK, the Forties pipeline system and the other fine chemicals producers in Grangemouth are all still here and operational.”

Mr Hardie added: "The work we've done since last summer has given us and both governments a much better understanding of the scale of the opportunity.

“It's articulated a number of highly credible project pathways, aligned to clear timeframes, which collectively could make Grangemouth a low-carbon superpower and create real economic growth in the medium term."

The initial examination for the future of Grangemouth cast the net wide on what manufacturing processes could happen, with an ambition to get “back to the Victorians” and thinking big about future infrastructure projects.

Impractical projects such as nuclear power were ruled out from the outset, with the potential ideas whittled down based on the International Energy Agency’s clean technology guidelines and whether the ideas were ready to go.

With an ambition to turn away from traditional oil and gas, an initial plan to re-establish the cultivation of sugar beet in Scotland, which ceased as an industry in the 1970s, was considered by Ineos bosses, before being ruled out before plans were taken any further.

But this way of thinking has opened the door to bio feed stocks being used for manufacturing processes, particularly trees and lignosic.

READ MORE: Petroineos poised for tax breaks despite refinery closure

Potentially, new manufacturing industries at Grangemouth could see bio feed stock such as trees fermented to produce ethanol and using that as a building block for fuels, chemicals or plastics.

Alongside projects that could harness bio fuels, bosses have looked at harnessing energy from waste, potentially through a process called anaerobic digestion that can produce gasses that can be used in manufacturing.

There is also an examination of using Grangemouth as a conduit for Scotland’s onshore and offshore wind industry, still growing and expected to scale up in the coming decades.

But potential barriers and high costs exist in moving the energy produced by Scotland’s wind south of the Border.

Amid the rethink over what Grangemouth can produce in the future, a lot of the focus so far has been on the potential for sustainable aviation fuel (SAF).

Unite the union has claimed the oil refinery could be easily turned into a SAF plant. But in reality that is not feasible, with any plans to produce the fuel needing to be done with a bespoke facility.

All of Scotland’s jet fuel is manufactured at Grangemouth, with Project Willow potentially opening the door for SAF to be manufactured at scale at the industrial hub.

Much of the First Minister’s frustration has been aimed at Petroineos for what he has suggested is the “premature” closure of the oil refinery.

But Mr Swinney’s anger over a lack of progress from the UK government in pushing forward Scotland’s Acorn carbon capture and storage project, has become less subtle, despite efforts to work closely with Westminster.

Carbon capture and storage (CCS) would prevent carbon emissions from entering the atmosphere - with the Scottish Acorn project, based at St Fergus near Peterhead, injecting the fossil fuel deep in the seabed.

But the UK government has prioritised similar projects south of the Border, with funding made available for Teesside and Merseyside, meaning Scotland’s carbon capture project has been put on hold.

That could be crucial for the future of the site, with proposals to use existing oil and gas pipes to transport carbon from Grangemouth back to the North East and into the Acorn system.

Mr Pritchard said: “We have a lot of dispersed carbon emission points with low concentrations of carbon. This makes hydrogen fuel switching, concentrating carbon at one emission point where blue hydrogen is made and using green hydrogen, the ideal way to reduce our emissions.

“Grangemouth is ideally placed for carbon capture and storage, with the Acorn project and SCO2T Connect project looking to reuse existing oil and gas pipelines.

“If you can’t make CCS work here, I think you will struggle to make it work anywhere.”

The plans for carbon capture would also unlock a potential hydrogen economy at Grangemouth.

Ineos has previously unveiled its plans to switch fuel to blue hydrogen, which converts methane natural gas into hydrogen and carbon as a by-product, which is then removed using CCS.

Hydrogen provides a high and intense heat needed for many manufacturing processes. But with constant delays to the Acorn project, Grangemouth could potentially use green hydrogen, which is around four times more expensive to produce than the blue strand.

Green hydrogen uses a high amount of renewable wind energy to power a process called electrolysis to split water molecules into hydrogen and oxygen. RWE has established initial plans to develop a green hydrogen production facility within the Grangemouth industrial area with the product initially to be supplied to Ineos.

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The proposal comprises an electrolysis plant of up to 200MW, as well as associated infrastructure to connect to nearby industry. Once operational, potentially by 2029, the site would be capable of producing up to 3.6 tonnes of hydrogen every hour.

The First Minister has announced a £25 million just transition fund to “expedite any of the potential solutions that will be set out in the Project Willow report”, as well as “other proposals that will give Grangemouth a secure and sustainable future”.

UK Labour Scottish Secretary Ian Murray said Project Willow “was commissioned within days of Labour taking office”.

He added: “It could have been commissioned months beforehand, but only got the green light after Labour won the election. At every step of the way, it has been Labour that has driven a sense of urgency to Grangemouth.”