Chancellor Rachel Reeves is set to announce up to £14.5 million in new funding for Grangemouth when she delivers the UK Government’s Autumn Budget on Wednesday 26 November, marking the latest instalment in a multi-layered public funding strategy aimed at transforming Scotland’s sole, and now shuttered, oil refinery into a clean energy cluster.
The additional capital, which a Treasury source described as evidence that the government is “standing squarely behind communities like Grangemouth,” will support the site’s transition away from fossil fuel refining toward low-carbon manufacturing and green energy infrastructure. The funds are intended to complement—not replace—earlier commitments, including a £200 million pledge from the National Wealth Fund (NWF) announced by Prime Minister Sir Keir Starmer in February 2025.
Yet the announcement comes amid growing frustration from unions, local politicians, and displaced workers that the larger NWF allocation has yet to materialise, eight months after it was first promised.
Grangemouth ceased crude oil processing on 29 April 2025, bringing to a close more than 100 years of continuous refining operations at the site. Operated by Petroineos – a joint venture between Sir Jim Ratcliffe’s INEOS and state-owned PetroChina – the refinery accounted for approximately 14% of the UK’s total refining capacity and supplied around 65% of Scotland’s refined oil products, including petrol, diesel, and aviation fuel.
The closure resulted in the immediate loss of over 400 jobs at the refinery itself, with an estimated 2,800 additional roles supported across the supply chain now at risk. In its 2024 financial results, Petroineos reported a pre-tax loss of $250 million, citing “depressed refining margins, refinery availability and a challenging year for asset trading,” alongside one-off provisions related to the Grangemouth transition. The company has consistently argued that the facility – hampered by aging infrastructure, high capital maintenance costs, and competition from larger, more modern refineries in the Middle East, Asia, and Africa – was losing approximately $500,000 per day.
Unite, the union representing the majority of the refinery workforce, has disputed these figures, arguing that losses were inflated by accounting decisions, including a £344 million asset write-down in 2020. The union has also pointed to a conflict of interest, noting that PetroChina is expanding its own sustainable aviation fuel (SAF) production capacity and would benefit from importing finished fuels to the UK rather than refining crude domestically.
Project Willow: A Blueprint for Transformation
Central to the government’s strategy is Project Willow, a £1.5 million feasibility study jointly funded by the UK and Scottish governments and conducted by EY. Published in March 2025, the study evaluated more than 300 technologies and identified nine viable low-carbon industrial projects for the Grangemouth site, spanning three categories: waste processing (including hydrothermal upgrading of plastics and chemical recycling), bio-feedstock utilisation (such as converting Scottish timber into bioethanol and producing sustainable aviation fuel), and offshore wind integration (including hydrogen production and ammonia for shipping).
According to the study’s findings, these projects could create up to 800 direct operational jobs by 2040 and deliver an estimated £1.2 billion in annual gross value added (GVA) once fully operational. However, the report also underscores significant challenges: low-carbon fuels and chemicals remain substantially more expensive to produce than fossil-fuel alternatives, and the transformation will require an estimated £3.5 billion to £4.25 billion in private sector capital investment, alongside new supply chain development.
Critically, Project Willow acknowledges that no new jobs are expected to materialise until after 2030, leaving a potentially devastating “jobs gap” in a region already grappling with economic deprivation. A 2024 report by Scottish Enterprise found that while Grangemouth refinery jobs represented less than 1% of the Falkirk labour force, average salaries were approximately 45% above the local mean—relatively well-paid technical roles that may not be easily replaceable in the local economy.
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Grangemouth’s transformation is emblematic of broader tensions facing the UK as it seeks to balance industrial heritage, economic security, and climate commitments. The site remains home to INEOS-operated petrochemical and plastics plants employing around 1,500 workers, alongside the Forties Pipeline System, which transports 300,000 barrels of crude oil daily from 85 North Sea fields. These facilities continue to operate, but concerns persist about their long-term viability in a decarbonising economy.
The Scottish Trades Union Congress (STUC) has argued that the £200 million NWF allocation “will only have a transformative impact if used correctly and is accompanied by even further investment from both governments,” calling for action that “secures the jobs and the futures of the workforce in the here and now”. First Minister John Swinney has repeatedly stated that “refining at Grangemouth should continue, that this closure is premature and that it is detrimental to Scotland’s transition to net zero”.
As the Chancellor prepares to deliver her Budget on Wednesday, all eyes will be on whether the £14.5 million represents a meaningful down-payment on a credible industrial strategy—or merely another instalment in a drawn-out process that risks leaving workers and communities behind.
