Saving Grangemouth needs eye-watering amount of cash and political will to become a reality
Scotland’s two governments will need to make it as easy as possible for investment in green fuels and manufacturing to save Grangemouth from collapse - with a £3.5bn price-tag put on the ambitious plans.
Hopes to secure a sustainable future for Scotland’s remaining industrial heartland have been pinned on the flagship Project Willow - but the blueprint needs a whopping amount of cash from corporations to turn a pipe dream into a reality.
Ineos and Petroineos have faced a wave of criticism over the decision to close Scotland’s only oil refinery - a facility that was costing the business £385,000 a day.
The companies have been branded by Scotland’s two governments as the baddies, despite warning politicians more than five years ago that the refinery will have to close without radical action from politicians.
Despite the UK and Scottish governments taking credit for the Project Willow feasibility study they put £1.5m into, the nine projects set out in the report were conceived by Petroineos.
Project Willow is even named after the cat of the daughter of a key player in Petroineos. It is a deeply personally piece of work to safeguard the future of the site.
The strategy, if successful, would not only transform one of Scotland’s most pollution-creating sites into a green energy hub, but would potentially rejuvenate the country’s stuttering net zero ambitions.
It is clear that lots of money is there to be made in the net zero revolution, despite what Conservative leader Kemi Badenoch has claimed this week.
But there are huge financial barriers that will need to be overcome if Project Willow is to become something more than a dream.
The most obvious risk is that £3.5bn of private sector investment will be needed for the “base case” - an almighty amount of funding to be levered in from private companies.
As the report starkly points out, “low-carbon fuels and chemicals remain more expensive to produce than fossil alternatives”.
Three years ago, then first minister Nicola Sturgeon began lobbying investors in the City of London to encourage them to invest in Scotland’s net zero hopes. But despite some positive investments setting up in Scotland, it has been no easy task.
The lack of concrete alternative funding sources for Scotland’s clean heat strategy has likely contributed to that policy, once hailed by independent experts as a blueprint for the rest of the UK, now being redrawn due to potential high costs to the public.
The nine ambitious projects proposed for Grangemouth could potentially find the vast amounts of money needed to become a reality. But when they are competing with similar plans across the world, both the Scottish and UK governments will need to make it as easy and clear as possible for investors to put their hands in their pockets.
That includes crystal clear policy ambitions about future clean energy priorities - as we are seeing from Ed Miliband and the UK Labour government. The SNP government has, quite remarkably, still not published its long-delayed energy strategy and we still don’t know for certain where the administration stands on new oil and gas developments.
But politicians at Westminster and Holyrood will also need to completely overhaul regulations in agriculture, forestry, waste and a whole bunch of other industries - for investors to splash their cash at Grangemouth.
Despite hopes pinned on Project Willow to save Grangemouth from catastrophe, it is clear this is just the beginning of a very long and expensive journey.
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