This item was published during the term of a previous administration that ended in April 2007
Listen
Funding for green fuel production
17/10/2006
Europe's largest biodiesel production plant is to be built in Scotland with funding support from the Scottish Executive.
INEOS Enterprises confirmed today that they are to invest almost £70 million in a green fuel production facility at their Grangemouth site, which when operational in 2008 will supply around 35 per-cent of the UK's biodiesel needs.
The investment has been backed by £9 million of Regional Selective Assistance from the Scottish Executive, helping safeguard 410 jobs and creating a further 20 posts at the Grangemouth manufacturing complex, including jobs associated with the construction and operation of the new facility.
Deputy First Minister Nicol Stephen said today's announcement was a major development not only in reducing carbon emissions but in enhancing Scotland's role as a leader in the field of renewable energy.
Mr Stephen said:
"Scotland is leading the way in the development and production of clean, green energy, including wind power, marine energy, biomass and hydrogen technology.
"We are also determined to play a major role in reducing transport CO2 emissions as part of the UK government's Renewable Transport Fuel Obligation. By 2010 all transport fuel sold in the UK will need to contain at least five per-cent from renewable sources, saving one million tonnes of carbon per year - the equivalent of one million cars off the road.
"The Grangemouth facility will be the largest single biodiesel plant in Europe, and will not only supply around a quarter of the UK's total biofuel needs by 2010, but will provide fantastic opportunities for Scottish agriculture to provide the raw materials.
"The £9 million RSA offer is the largest we have ever made to a renewable energy project.
"This is good news for the workforce in Grangemouth, good news for our clean energy ambitions, and good news for Scotland's wider business growth potential."
Denis Taylor, Director, Trade & Investment, Scottish Development International added:
"This investment presents an exciting and important opportunity for Scotland. It will generate local and regional benefits through the creation and protection of jobs at Grangemouth, and the economic contribution made through the use of local suppliers.
"In a wider context it will assist Scotland to achieve its commitment to increase the use of biofuels and reduce the impact on the environment from non-renewable energy sources.
"The Scottish chemicals sector is a regional priority industry for Scottish Enterprise and it places great importance on delivering solutions which consider social, environmental and economic impacts. Our executives have been involved in the development and execution of a number of initiatives with INEOS and the industry at large and this investment is testament to the chemical industry's strength in Scotland and its approach to growing and developing the chemicals industry for the future."
Harry Deans, INEOS Enterprises CEO said:
"INEOS has selected the Grangemouth site for this major investment as it presented us with the best possible choice of location to grow our biodiesel business within the UK. The Grangemouth site has excellent supply infrastructure and a highly skilled workforce and as such is a major site of strategic importance to the UK petrochemicals and chemicals industry.
"The political environment within Scotland is highly conducive to encouraging inward investment, and for this reason we are delighted to have been able to work so closely with the Scottish Executive to bring this investment to Scotland. We look forward to working with the Scottish Executive in the coming months to ensure that we rapidly bring this exciting project to fruition."
Background
INEOS is a global manufacturer of refined products and basic, intermediate and speciality chemicals. The Company is made up of multiple decentralised businesses, each with a major chemicals company heritage.
Biofuels are sources of energy that are manufactured from renewable resources, for example rapeseed. Specifically, biodiesel is an alternative fuel produced from renewable sources such as vegetable oils that after refinement can be blended with diesel and used to power conventional diesel engines without modification. It can also be used as a replacement fuel for oil in industrial processes.
Regional Selective Assistance (RSA) is the main national scheme of financial assistance to industry. It provides discretionary grants for investment projects that will create or safeguard jobs in Assisted Areas - areas designated for regional aid under European Community law.
Payments of RSA are made in instalments, typically over several years, provided that job and project expenditure targets are met. The amounts quoted above, therefore, represent the maximum grant potentially payable if the project is satisfactorily completed, and not the amount actually paid to date.
All job numbers are based on firms' forecast figures at the time a grant is offered, and are subject to change depending on future economic conditions and other factors affecting the business concerned. For further information, go to www.rsascotland.gov.uk
Scotland's Chemical Industry is an important contributor to the Scottish economy with 14,000 people employed directly and 70,000 indirectly. It contributes significantly to the country's GDP and accounts for 8% of Scottish manufacturing turnover.