Jobs and investment must be forthcoming
Scotland’s Just Transition Commission demands governments at Holyrood and Westminster ensure money announced for Grangemouth last month is used support workers and the local community.
The commission also urged lessons from Grangemouth need to be learned if the move away from oil and gas is to be done fairly.
In a letter to Scottish Government ministers the commission welcomed the new investment, but warned “there is a premium on investment that provides a rapid jobs stimulus to the region here and now” as new technologies for the industrial site at Grangemouth may take years to become established.
The Commission also published new research focused on Grangemouth showing how the fairness of the low carbon transition can be measured.
The commission is an independent expert advisory group with members drawn from business, industry, trade unions, environmental and community groups and academia. It aims to make sure the benefits and burdens of the major changes involved in Scotland’s net zero transition are shared as fairly as possible, and is tasked by the Scottish Government with making an annual assessment of progress towards a just transition to a low carbon economy.
Scottish and UK governments have jointly funded Project Willow, a report assessing different proposals for securing Grangemouth’s industrial future, which is expected to be published shortly.
The closure of the oil refinery by owners Petroineos, a joint venture between Chinese state oil company PetroChina and INEOS, a privately owned company, has dominated headlines. It is expected transition planning efforts by government are considering the future of the entire industrial cluster, the town and its residents.
The Commission’s letter calls on government to set conditionalities around public investment to safeguard value for money for the public, as well as social and environmental sustainability. It recommends that existing businesses within the industrial cluster should be screened against sustainability criteria to determine their eligibility for public investment.
The commission says the refinery closure at Grangemouth shows the need for employers to take responsibility for managing the social impact of phasing down high-emitting operations. “The current situation highlights the continued absence of a clear set of standard expectations on high carbon employers, supported by incentives and regulation.
This risks setting a precedent that private companies can exit a business area without adequate planning, leaving the public purse to bear the cost of transitioning the workforce and subsidising private commercial operations without appropriate guarantees on economic and social return on investment.”
The commission underlined the importance of investment that helps achieve a new economic model for Grangemouth that ensures local people have “a stake and say” in successful industrial operations.
There is also a warning on learning the lessons of Grangemouth for the North Sea transition. “While Grangemouth is critical to the future of industrial Scotland, lessons need to be rapidly applied if we are to manage the challenge of the considerably larger job losses that are already underway in the North Sea.
The speed of job losses here may depend on the volatility of commodity prices, but there is no doubt the basin is declining and workers require support to transition to new jobs if we are to avoid a disorderly and unjust transition.
Due to the fragmented nature of oil and gas employment in Scotland, this may not yet be visible in large numbers of redundancies made simultaneously by a large employer.”
The commission also published a new research report today, titled “Assessing the low carbon transition at Grangemouth: A case study for measuring fairness.”
The report builds on work last year that set out a practical approach to measuring the success or failure of efforts to achieve a just transition in Scotland. It examines the situation at Grangemouth and how the fairness of the transition underway at Scotland’s largest industrial site should be assessed.
The report says the draft just transition plan for Grangemouth can be improved by doing more to identify and safeguard vulnerable groups in the area, in addition to the core focus on supporting the innovative technologies it is hoped will require large numbers of skilled workers.
The report found some indicators, such as average salaries, unemployment levels and fuel poverty prevalence are currently improving, but warned that available figures don’t yet reflect the impact of the refinery closure. “Data in the forthcoming year is likely to show significant deterioration if just transition processes are not effective,” says the report.
The report says the Scottish Government should proactively begin monitoring and evaluation work for Grangemouth right away and set targets for what success would look like, “so that the long-term impact of ongoing industrial transformations can be understood for local communities and environments.”
The report cites the closure of the Ratcliffe-on-Soar coal power station in Nottinghamshire as a positive example of a just transition away from high carbon industry. “Through a collaborative, coordinated process between employees, unions and other key stakeholders, every affected worker moved into a new job, enabled by funding and support for workers to reskill, retrain and find new jobs whilst ensuring ongoing plant operability.”
In December the Commission called on the Scottish Government to deliver a world-first by setting quantifiable targets for achieving a just transition to a low carbon economy.
“The establishment of interim just transition targets up to 2045, aligned with Scotland’s carbon budgets, would constitute a genuine world first in climate and economic policy innovation,” said the commission’s earlier report. “For the just transition, as for other complex and demanding endeavours, what gets measured gets done.”
