John Swinney vows £25m Grangemouth fund to kickstart hub's green future

The First Minister said he would make the Grangemouth just transition fund available in next year’s Budget, set to be agreed by MSPs next week, following the decision by Petroineos to close Scotland’s only oil refinery at the site.

Politicians have claimed the decision to close the facility, which was shedding money for Ineos and Chinese state-owned PetraChina in a joint venture, had come too soon. Mr Swinney told MSPs the closure had been “premature”.

Project Willow, co-funded by the UK and Scottish governments, is due to report back by the end of the month on options to be taken forward at the site.

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But Mr Swinney has earmarked £25m of extra funding to accelerate future options being drawn up.

Speaking in Holyrood on Tuesday, he said: “That funding, derived from the proceeds of the ScotWind process, will be available immediately in the new financial year to support businesses and stakeholders to bring forward investible propositions over the next 12 months and, if necessary, beyond.

“The aim is 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.”

Mr Swinney added: “Through the Grangemouth Future Industries Board, we will work with the local authority, businesses and the unions to explore and accelerate projects and proposals that support this ambition.

“Through Project Willow, we have the foundations of a strong evidence base for future investment in technologies such as plastics recycling, hydrogen production and the development of sustainable aviation fuel.”

Mr Swinney also reiterated his demands for the UK government to finally confirm the green light for Scotland’s carbon capture and storage strategy, the Acorn project, which could be crucial in ramping up hydrogen production at Grangemouth.

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He called on Labour ministers for “urgent progress on allocating funding for the second round of hydrogen production projects”.

Mr Swinney said: “Scotland and indeed Grangemouth is well placed to lead on the production of green hydrogen and I know that a number of Scottish businesses submitted funding proposals to the UK government’s hydrogen allocation round, which closed last April – nearly a year ago.

“These businesses are still awaiting a UK government decision on shortlisting. We need immediate progress on this.”

The First Minister has called on the UK government to “at least match our funding commitment to deliver a just transition fund for Grangemouth”.

In response, Labour Scottish Secretary Ian Murray claimed the £25m of funding was only “made possible by Labour’s austerity-ending budget, which delivered £4.9 billion extra for the Scottish Budget”.

He said: “We will consider the announcement today in detail, and set out our own next steps in due course.

“Project Willow, a jointly-funded study looking at a long-term sustainable future for the site, was commissioned within days of Labour taking office. It could have been commissioned months beforehand, but only got the green light after Labour won the election.”