Nothing for Grangemouth from the UK Gov - and a kick in the teeth for ScotWind
Where is the £200 million the UK Labour government promised to invest in Grangemouth to bring new green jobs? It has not materialised and nor has the considered market framework needed to create a sustainable aviation fuel hub there.
More evidence that Scotland’s just transition to renewable energy is just not a priority for the UK comes with the attack on ScotWind, Scotland's offshore wind programme. The UK is deliberately damaging its potential for success.
Onlookers have to ask if this is because the prospect of Scotland capturing more of the value chain of its own resources would threaten the extractive model of the British state and London’s political power over Scotland?
Grangemouth latest
News broke last week that Grangemouth is to get a big nothing from a £200 million sustainable aviation fuel funding rollout called Project Willow. Not a penny.
When the closure of Scotland’s only refinery and the loss of hundreds of well-paid jobs was hitting the headlines. Prime Minister Keir Starmer made a commitment that Grangemouth would get £200 million from the UK’s National Wealth Fund.
Addressing the Scottish Labour Conference in Glasgow in February 2025, Keir Starmer said: “To attract private investors into the partnerships we need, we will allocate £200m from the National Wealth Fund for investment in Grangemouth.”
This was at last the kind of investment that could help to make good on the promise that this time an energy transition would be a just transition. Instead of throwing workers on the scrap heap, it seemed the UK might finally help Scotland to be ready for the technologies of tomorrow.
But 18 months later how much has materialised? Nothing. And now we know that there is more nothing coming to Grangemouth from a £200 million sustainable aviation fuel funding roll out. Meanwhile, the UK gov is finding £1.5 billion to keep British Steel’s plant going at Scunthorpe
Scotland is globally attractive for green investment, yet London is killing it
The EY Foreign Direct Investment (FDI) data shows that international capital is coming to Scotland. It is currently ranked third in Europe for energy investment - capturing 55% of all UK energy FDI projects.
However, Westminster's management of grid infrastructure and market rules systematically threatens that.
We wrote here about the UK decision to knock out the Ming Yang wind turbine factory that the Scottish Government had worked to attract to the redeveloped yard at Ardersier which now sits empty.
Now, under the National Energy System Operator’s (NESO) Strategic Spatial Energy Plan(SSEP) and "Connections Reform" (Gate 2), multi-billion-pound ScotWind projects are being deprioritised or pushed back in the grid queue. Despite developers paying billions for seabed leases, London’s grid framework fails to offer firm connection guarantees, leaving world-leading floating offshore wind developments in regulatory limbo.
Westminster's locational grid pricing is heavily penalising Scottish generators. Scottish offshore wind farms pay the highest Transmission Network Use of System charges in Europe simply for generating power in the north - while generators in the south of England are subsidised.
While other countries use a postage-stamp-style system (the same price regardless of location) to connect to national-owned infrastructure, Scottish companies have to pay for private firms to build connections. That is because a UK Government Scotland never voted for voted to privatise the national grid - virtually the only country in Europe to do so.
Trade bodies like the Aberdeen & Grampian Chamber of Commerce (AGCC) and Energy Transition Zone (ETZ) are warning that when grid access is delayed, local supply chain investments collapse. Investors do not build blade, cable, or turbine manufacturing plants in Scotland.
The background to Grangemouth
Scotland’s last refinery, Grangemouth, made aviation fuel for the whole UK. Even before it was closed, a proposal to make it a hub for green aviation fuel was covered by Business for Scotland back in 2024.
Back then, the UK government issued a press release entitled 'UK and Scottish governments announce joint plan to secure industrial future of Grangemouth'. It announced a three-point plan for a just transition for the workforce and community, including a new £100m package
A feasibility study was published in March 2025. It named Grangemouth as an ideal site for Sustainable AF production. It could have had a just transition into a world-leading bio-hub.
It turned out that the UK gov’s offer of £200 million depended on public private partnerships and to unlock it, the private sector would have to put in £2 billion.
But this investment would require Westminster’s whole-hearted backing - which has not materialised. That kind of investment does not happen unless the state puts in a strong framework that guarantees an income. Investors have to have certainty before taking their money out of the bank.
A major commercial SAF build requires market mechanisms like a guaranteed Revenue Support Mechanism (price floor) to manage risk. Because those energy market regulations are reserved to Westminster, Holyrood cannot establish them. Westminster holds all the levers to attract and manage this kind of investment. It has not chosen to do so.
It must have known all along that without such a framework, there would be nothing for Grangemouth.
We have been here before
Just like with coal; so with oil. Scotland is not getting the backing it needs for a just transition to the technologies of the future.
While hundreds of millions in state subsidies are funnelled to English manufacturing to preserve domestic capacity at Scunthorpe, Grangemouth’s transition into a £2.1 billion Sustainable Aviation Fuel (SAF) hub is being purposefully starved of the regulatory price floors and public capital required to make it reality.
When Chinese firm Ming Yang sought to invest £1.5 billion to build the world's largest wind turbine manufacturing facility at Ardersier - a project set to create 1,500 high-skilled industrial jobs - Westminster unilaterally killed the deal using reserved "national security" powers, despite approving similar Chinese-backed investments in England.
Now they are attacking Scotland’s wind potential with a “national plan” that is designed to suit England. Scotland is an energy-rich, resource-rich country. But it is a leaky bucket. It captures little of the value of its natural resources as part of the UK. It does not get the value-add, the manufacturing, the diversification, even the infrastructure that the country needs to benefit from the green transition. It can’t get these things while being part of the UK.
By failing Grangemouth and attacking ScotWind, Westminster is turning what should be a high-value industrial revolution into an extracted commodity. Proving once again that the current unionist framework cannot deliver a Just Transition.
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