Backed by £25 million from the Scottish Government and £200m from the UK Government, the Project Willow plan looks to support jobs, unlock investment and drive growth.

The £1.5m feasibility study published by EY follows the recent decision by Petroineos to decommission the oil refinery.

It has identified credible long-term industrial options for the Grangemouth site and explored how Grangemouth can build on its skilled workforce, local expertise and long heritage as a fuel leader in Scotland to forge a new path in low carbon energy production.

The report provides nine proposals likely to attract private investment, including plastics recycling, hydrogen production and other projects that could create up to 800 jobs by 2040.

The nine projects include: 

• Waste: hydrothermal upgrading (breaking down hard to recycle plastics), chemical plastics recycling, ABE biorefining (breaking down waste material)
  Bio-feedstock: breaking down Scottish timber into bioethanol, anaerobic digestion of bioresources and digestate pyrolysis, HEFA (conversion of Scottish cover crops into sustainable aviation fuel and renewable diesel using low carbon hydrogen).
• Offshore wind conduit: Replacing natural gas with hydrogen, using low carbon hydrogen to produce methanol and convert it to SAF, producing low carbon ammonia from hydrogen for shipping and chemicals. 
• Any National Wealth Fund investment will be subject to investible propositions and the Fund’s criteria – the proposition must deliver a positive return, drive regional and economic growth or support activity to tackle climate change, invest in key sectors, and crowd in private finance.

It follows First Minister John Swinney’s announcement of £25m to establish a Grangemouth Just Transition Fund, which will support businesses and stakeholders to bring forward investible propositions for the site over the next 12 months, and the Prime Minister’s announcement last month of £200m to help unlock Grangemouth’s full potential.

First Minister John Swinney said: “We will leave no stone unturned in order to secure the future of the Grangemouth refinery site, and the Scottish Government has already committed or invested a total of £87m to help do so.

“Grangemouth is home to over a century of industrial expertise and employs thousands of highly skilled workers, placing the site at a massive competitive advantage and creating a unique opportunity for investors.

“Everyone working at Grangemouth’s refinery – and in the wider industrial cluster - is a valued employee with skills that are key to Scotland’s economic and net zero future.

“This report sets out a wide range of viable alternatives for the refinery site, demonstrating that a long term, new industrial future at Grangemouth is achievable. We will continue to work closely with the UK Government to realise these opportunities and Scottish Enterprise stands ready to support inward investors looking to progress any of these technologies.”

UK energy minister Michael Shanks said: “We committed to leaving no stone unturned in supporting an industrial future for Grangemouth delivering jobs and economic growth. 

“This report and the £200m investment by the UK Government demonstrates that commitment. 

“We will build on Grangemouth’s expertise and industrial heritage to attract investors, secure a long-term clean energy future, and deliver on our Plan for Change.” 

To kickstart the process, energy minister Michael Shanks and acting cabinet secretary for net zero and energy Gillian Martin co-chaired a meeting yesterday of the Grangemouth Future Industry Board with local industry leaders, Falkirk Council, trade bodies and unions. Scottish Enterprise and the UK Government’s Office for Investment will work with Petroineos to market the proposals set out in Project Willow and seek investor interest.   

Alongside launching a search for investors, both governments have also committed to review the Project Willow policy recommendations and understand how government funding can be deployed to mature proposals from the private sector. 

Scottish Enterprise (SE) has welcomed the publication of the Project Willow report and launched its enquiry service to manage requests for information from investors and companies interested in investing in the site.

Jane Martin is SE’s managing director for innovation and investment and oversees SE’s dedicated team focused on the transition of Grangemouth.

She said: “This publication marks a significant milestone in ensuring Grangemouth continues with its hugely important role in Scotland’s economy.

“Grangemouth already has a great workforce, transport links and ongoing development.

“And the Project Willow report will bolster the canon of work already being done by Scottish Enterprise and partners across the Grangemouth Cluster to build an exciting future for the site.

“Project Willow has identified an opportunity to align Scotland’s industrial regeneration with government climate obligations, and to demonstrate a pathway to green energy while securing new jobs and growth.

“The nine recommended projects all have the potential to help advance the development of low carbon technologies in Scotland whilst ensuring Grangemouth remains THE location of choice for investors and innovators in the sector.

“We also want to hear from investors interested in other opportunities across the wider site.

“SE has a clear ambition to help create the best possible location, infrastructure and enabling environment for success, and to attract investors and industrial partners who share that ambition.”

Scottish Enterprise said it will now work on behalf of both UK and Scottish governments to identify and seek out potential investors, in partnership with the National Wealth Fund, Scottish National Investment Bank and the Office for Investment, to come forward with commercially viable proposals, including those set out in the Project Willow report.

Stephen Boyd, director at IPPR Scotland, added: “The Project Willow report confirms the range and quality of potential development opportunities for the Grangemouth site. However, the proposed timescales for development suggest that the workers being made redundant this summer may struggle to quickly find new jobs. 

“Therefore, it is essential that both governments and relevant agencies now redouble efforts to turn potential developments into tangible opportunities for those being made redundant at the refinery and local young people looking to enter the labour market. It remains to be seen whether the support promised by both governments will be sufficient to leverage the scale of private investment required. 

“There should also be a deep and rapid reassessment of the process of ‘just transition’ in Scotland. It is essential that the right policy framework, funding and institutional infrastructure is quickly put in place to ensure that the process of transitioning from incumbent high emission to emerging low emission sectors becomes significantly less traumatic for the workers concerned.”