Stephen Flynn, Scotland’s new Economy Secretary, made his first official engagement a visit to the country’s two most high-profile industrial sites in crisis, meeting former workers from the Grangemouth refinery and the ExxonMobil Mossmorran ethylene plant alongside officials from Unite the union. In a speech that set the tone for his tenure, he declared the Scottish Government would be “bold, innovative and ambitious” in shaping Scotland’s industrial future.
Mr Flynn, appointed Cabinet Secretary for Economy, Tourism and Transport in May, toured the Grangemouth Industrial Complex – where Scotland’s only oil refinery stopped processing crude oil last year after a century of operations – and later visited the Mossmorran site in Fife, which ExxonMobil closed in February. He said it had been “heartening” to hear about the work being done by a wide range of partners to support affected workers and secure positive outcomes for them and their families.
Job losses and economic shockwaves
The closure of the Grangemouth refinery has delivered a severe blow to Scotland’s economy. Statistics published by the Scottish Government show GDP growth fell by 0.4% in the three months to May, wiping out gains from the previous quarter, and in May alone the economy contracted by 0.2%, with manufacturing output dropping 4.1%. The loss of direct jobs at the refinery is estimated at approximately 400, part of a wider reduction of 430 positions across the 2,000-strong industrial complex. According to the site’s owner, Petroineos, the facility has been turned into an import-only terminal for finished fuels, cutting the workforce to around 75 people. Unite the Union has condemned the move as “industrial vandalism” and called for a clear plan for affected workers.
The wider supply chain has also been badly hit, with an estimated 2,800 jobs at risk and some reports suggesting up to 4,600 roles could be affected. The annual economic deficit to the local economy has been calculated at £403 million. Grangemouth is now seen as an early test case for a “just transition” away from fossil fuels, but both the UK and Scottish governments have faced criticism for failing to prevent the closure or adequately support workers. Unite has developed a detailed plan for converting the site to sustainable aviation fuel production, which it has presented to ministers.
A joint feasibility study, Project Willow, funded by the UK and Scottish governments, has identified nine potential low-carbon options for the site, including plastics recycling and hydrogen production, with the potential to create up to 800 jobs by 2040. The UK government has pledged £200 million towards Grangemouth’s future, while the Scottish Government has committed £87 million in total support, including a £25 million Just Transition Fund. Scottish Enterprise is actively working to develop Grangemouth into a “globally competitive, net zero industrial cluster”.
At Mossmorran, the closure of the ExxonMobil plastics plant – which had operated for more than 40 years – resulted in the loss of approximately 400 jobs, comprising 180 ExxonMobil employees, 200 contractors and 50 other staff. The company cited economic non-viability and an inability to find a buyer. Unite called the decision a “betrayal” and a “disgrace”, noting that the plant was profitable and that workers were informed of the early closure only late the night before, with the plant shutting down two weeks ahead of schedule. The Scottish Government has committed £9 million over three years to support retraining and employability assistance, and a task force led by Fife Council has been established to secure the site’s long-term future.
Stephen Flynn has argued that the UK Government’s policy environment is accelerating the exit of vital industries and domestic manufacturing, describing the closures as part of a wider trend in which Europe’s high-cost, low-return legacy assets are being systematically phased out amid global energy transition shifts.
Celtic Renewables: a blueprint for Scotland’s industrial future
Against this backdrop, Mr Flynn’s visit to Celtic Renewables – a biorefinery based at the Grangemouth Industrial Complex – was held up as evidence that a brighter future for Scotland’s industrial heartlands is possible. The company, founded in 2012, has secured a combined £16.23 million in recent funding: £6.23 million from the Scottish Government’s Grangemouth Just Transition Fund, £5 million from Scottish Enterprise and £5 million from private investors. That injection is supporting the planning and development of a new £120 million industrial-scale biorefinery on the same site, which is projected to create nearly 150 jobs by 2030.
Celtic Renewables uses ABE fermentation to produce bio-acetone, bio-butanol and bioethanol from waste materials such as whisky pot ale and rejected potatoes. Its demonstrator facility in Grangemouth has been operational since 2023. The company has now secured more than £90 million in total public and private funding since its inception, according to figures from Scottish Enterprise.
“It was great to join the Cabinet Secretary at Celtic Renewables and show first hand Scottish Enterprise’s continuing commitment to Grangemouth,” said Adrian Gillespie, chief executive of Scottish Enterprise. He described Celtic Renewables as “a strong example of an innovative, scaling company that has benefitted from Grangemouth’s excellent connectivity and skills, enabled by funding and support from Scottish Enterprise and our partners”. Gillespie noted that Scottish Enterprise had worked with the company since its start-up in 2011 and continues to do so as it “accelerates plans for a full-scale biorefinery creating more high-quality jobs”.
During his visit, Mr Flynn said Celtic Renewables was “a growing success story which illustrates that there can – and must – be an incredibly bright and positive future for our industrial heartlands and the communities they support”. He reiterated his commitment to ensuring that “strong, vibrant and indispensable industries – which have been let down by successive UK governments – are at the heart of Scotland’s economy”. The Scottish Government’s Green Industrial Strategy, which aims to harness the economic benefits of the global transition to net zero, identifies clean hydrogen, recycling and green chemicals as key opportunity areas, and a mission-oriented approach – advocated by a framing paper co-authored by Professor Mariana Mazzucato and Future Economy Scotland – encourages the government to act as an “investor of first resort” rather than a “lender of last resort” in driving system-wide transformation.
