Chamber and committees

Those are the exact questions that I asked of the site management when I met them previously and of the joint venture shareholders when I met them yesterday. The discussions and work are on-going around that.

I wish to underline that this is an incredibly challenging situation. I think the team said that they are in a stable financial situation at the moment, but they have not been in the past, and the projections for the margins for the site show that a substantial subsidy and investment have come from the joint venture in order to retain the site. I do not wish to set unrealistic expectations about what might be possible or what might be considered by the joint venture to be necessary to see the refinery go beyond 2025. However, as Mr Smyth would expect, those are exactly the points that are being raised in the active discussions that we are having with the joint venture about what might be possible there.

The earlier part of Mr Smyth’s question was about the supply chain. In response to Maggie Chapman, I indicated that we are assessing the situation with the supply chain, but we have to recognise that, when there is a transition from a refinery to an import terminal, substantial supply chain activity will be maintained due to the nature of the new activity. We need to do more work on examining exactly what that will look like.

You will be aware that there are industrial reasons why we already have to import significant amounts of oil and gas, but particularly oil, into Scotland.

That is a fair comment. With a century-old refinery that has been loss making and has received intervention at numerous points over recent years, it is a fair assessment to say that there was a risk around its future, especially as it is competing with super-refineries elsewhere in the world, particularly in the middle east and China. The viability of refineries not just in Scotland and the rest of the UK but in this part of Europe is being driven down by that international competitiveness.

We have been in discussion with the joint venture for some time around making sure that there is a future for the Grangemouth site and looking at all the possible options for a just transition. We have previously raised points on hydrogen, carbon capture and a biorefinery. However, as I said, the first time that we were made aware of the decision was at the same time as the workforce were made aware. I have to say that it is admirable and credible that the joint venture chose to tell its workforce first and at the same time as it told us.

I understand the question. It is a fair point. I used SSEN in the north-east as an example. Jobs are being created across Scotland and there will be job opportunities there.

For the Grangemouth site, we are looking to take forward opportunities, as I said, through the Grangemouth future industry board and our just transition plan, as well as through the work that we are doing with the joint venture, the UK Government and others to ensure that there is continued industrial capacity and new opportunities in areas such as hydrogen, carbon capture and the biorefinery. We are trying to ensure that those opportunities happen as quickly as possible, although we recognise that some of them are at a more advanced stage than others and that some depend on decisions that are not for us to make. Some of the decisions are outwith our control, but we continue to push hard to see progress in those areas.

We are doing that work. We will continue to do that work, alongside other parties, including enterprise agencies and the Grangemouth future industry board.

As I said, the critical element that we have before us is about helping to inform the decision that the joint venture will take about the future of the refinery itself. Obviously, we understand that that will have an economic impact, and we will continue to work on what that looks like and made an assessment of it alongside other parties.

We will continue to work on that. I do not want to give any definitive timescales or dates around what we will be able to publish.

There are a number of elements to that. We have been doing a lot of work through the Grangemouth future industry board to look at opportunities for the Grangemouth site to ensure that there is continued industrial activity. We recognise that one aspect—the refinery—is approaching 100 years old and is not competitive on the international stage with other refineries around the world, as was set out by your previous panel. We have been engaging with the board on that work.

We also know that those affected are highly skilled workers. We do not know the final quantum of potential job losses, because we are still working with assumptions around what may be lost and what may be retained through an import terminal. However, we know that they are highly skilled workers and that they will be much in demand across the energy sector. Through the just transition plan, I am keen to ensure that there is as much opportunity as possible to retain them in Scotland.

The other element that Mr Smyth spoke about is how the joint venture can retain those workers for as long as the refinery is operational. The First Minister and I both posed that question to Mr Hardie and his colleagues when we met a couple of weeks ago. I believe that significant investment is being made to retain staff, recognising that this is an uncertain time for them. We have impressed on the company the importance of ensuring that it looks after and retains the workforce. It is in its interests to do so, to ensure that it has a viable workforce to continue the processes that are in place at the refinery.

I did not hear that part of the discussion, but I am happy to take that away and speak to the joint venture about its assumptions then come back to the committee with more detail.

That is absolutely my understanding. That was one of the first questions that I had, because I wanted to be confident about that. As I understand it, even with an import terminal, hydrocarbons will continue to be produced and there will continue to be elements of flaring, whereby substantial carbon can be captured from the refinery or the move to an import terminal. The wider Grangemouth site has significant carbon emissions that can be captured. I know from discussions with the joint venture, but also from discussions that I had with the cluster a couple of weeks ago in Aberdeen that Grangemouth is absolutely central to their plans.

I would have to go back to look at minutes of previous discussions.

We have been aware for a long time that the future of the refinery was at risk—as I said, there have been previous interventions. That is why we have been engaging heavily with it to ensure that there is a just transition and investment in the import terminal that ensures energy security for Scotland and other parts of the UK. Again, the joint venture is making an important investment so that, when a decision is eventually taken on the refinery, we have continued industrial capacity and energy security at the Grangemouth site and for the fuels that are needed for Scotland’s transport sector.