Committee publication · Correspondence · 2 April 2025 · HC 459
Letter from Unite the Union, regarding GB Energy and the net zero transition inquiry, dated 27 March 2025
Summary
Unite the Union's Scottish Secretary writes to the Scottish Affairs Committee ahead of evidence sessions on GB Energy and net zero transition, raising concerns about Project Willow's dismissal of asset conversion at Grangemouth refinery, arguing it could establish a Sustainable Aviation Fuel plant in 1–3 years at lower cost. Unite challenges PetroIneos's loss-making narrative, presenting financial analysis showing cumulative 2014–2022 profitability of £49m (excluding 2020 asset revaluation), and urges the Committee to scrutinize the company's accounts before closure.
Key findings
- Project Willow excluded assessing viability of converting existing Grangemouth assets to SAF/HEFA production despite asset conversion being 30–70% cheaper than new builds; P66's Rodeo refinery achieved HEFA transition in one year with no job losses at £1bn cost.
- UK lacks domestic SAF market and regulatory framework; without homegrown production, UK faces £3bn annual taxpayer cost importing 9 million tonnes of SAF from competitors including China, posing energy security risk.
- Unite disputes PetroIneos's 'loss-making' narrative: excluding 2020 anomaly year (£344m asset revaluation), refinery showed £49m net profit 2014–2022; 2022 accounts show £80m net profit.
- PetroIneos group structure obscures profitability: PI Fuels Limited (responsible for sales) generated cumulative $753m net profit 2014–2022 while manufacturing arm reported losses.
- Company took decision to shut hydrogen and hydrocracker units citing reliability issues Unite disputes; full capacity operation would transform reported daily £385k loss figure.
- Hydrocracker offline since April 2024 despite no intrinsic technical barrier to restart; company failed to invest allotted capital expenditure in asset maintenance.
Tone
AdversarialTopics
Key actors
Sharon Graham, Derek Thomson, Unite the Union, PetroIneos, Ineos, EY, PetroChina, Scottish Affairs Committee
Notable line
“… the loss-making narrative is exactly that, a story sold by the company to justify its decision.”
Key Quotes
“Asset conversion is generally 30-70% cheaper than building a new facility. For example, P66's Rodeo refinery in California transitioned to HEFA in one year, with no job losses at a cost of £1 billion.”
“Without a homegrown industry, the UK will need to import up to 9 million tonnes of SAF from our competitors abroad such as China at an additional cost of £3bn for the taxpayer according to industry experts, when it could be produced at Grangemouth.”
“… if what we describe as an 'anomaly year' in 2020 is discounted, then the refinery actually made a £49m net profit”
“… a valuation of plant and machinery in this one-year completely distorts the profit picture.”
“Don't believe everything the company is saying because the recorded accounts tell a completely different picture from the story PetroIneos is selling you and the Scottish people.”
Source · parliament.uk record ↗