GALP’s closure of Matosinhos refinery “an economic and social crime”

GALP’s closure of its Matoshinhos refinery in the north has left a minimum of 350 workers without jobs.

The fuel company that recently entered ‘the race for lithium’ has justified the closure on the basis that it is ‘good for the environment’ because it will be reducing carbon emissions. 

This is a strategy that had been ‘on the cards’ for some time, but appears to have been ‘accelerated’ by the pandemic.

Explain reports, Matosinhos is the 5th refinery in Europe to close due to ‘lack of competitiveness’.

It used to be responsible for providing a third of the nation’s fuel needs, but with all the moves towards a greener future, and the entry into the international market of ‘more competitive’ Asiatic refineries, Matosinhos ‘lost its edge’.

Explained director José Carlos Silva in meetings requested by the government and Matosinhos’ borough council, refining margins were negative “which means the company was paying more for the crude it imported than what it made from the fuel that it sold”.

Yes, the company is “concerned” about the fate of the refinery’s 400 workers, but around 60 will be kept on to work in the ‘logistic park’ that will be installed on the site, while there are solutions of “mobility, requalification, retirement and early retirement under evaluation” for the others.

“Each case is a case and the people will be heard and treated with respect”, assured Mr Silva – giving little information of ‘the industrial future’ envisaged for the 290 hectare waterfront site.

GALP was in the news recently for taking a 10% stake in the lithium mine owned by British company Savannah Resources in the northern Barroso region. It is a deal believed to give the fuel giant the rights of up to 100,000 tonnes of spodumene lithium concentrate per year – around 50% of the mine’s total expected production.

For now, the company is not elaborating over the possibility of a lithium refinery in Matosinhos. It simply says it is ‘evaluating the various opportunities in the area of energetic transition” and green hydrogen.

So why the ‘bad press’?

Left wingers in government have accused GALP of “great opportunism” in the way it has presented this fait-accompli. 

PCP communists for instance have suggested GALP is creating a ‘smokescreen’ with its ‘carbon neutral’ explanations, highlighting the “perverse effect” now of fuel deliveries having to be made by road to the north (as the only refinery left in Portugal is in Sines).

One could argue that the radical left would never be satisfied by any decision by GALP… thus a damning column today by Paulo Morais, former PSD deputy mayor of Porto, former Portuguese presidential candidate (2016) and leading figure in Transparency International shows antipathy is not just the preserve of the left.

Mr Morais calls GALP’s closure of the Matosinhos refinery “an economic and social crime” – and he accuses the government of playing along with it.

“The distinctive mark of the Matosinhos refinery is the manufacture of petrochemical products like paraffins, chemical solvents, naphthas, benzenes and asphalts which will now cease being produced in Portugal. Some are base materials for highly technological industries, like cosmetics, pharmacy, paints, solvents. We’re going to lose a very relevant technological capacity.

“This operation will be financed by public funding”, he added. “From the European Fund for Just Transition (worth €75 million) and by a share of the €119 million national envelope for Cohesion policies.

“As the market for the above-mentioned products will now be picked up by Spanish competitors Cepsa and Repsol, in practice the government is sending tens of millions of euros into the destruction of jobs in Portugal in order to create them in Spain. It’s a social crime!

“The argument for this extermination is environmental”, Morais continues, citing the much-referred to reduction in CO2 emissions.

“But Portugal emits less CO2 per capita than the majority of so-called green Nordic countries.

“In 2018, the country emitted 51 tonnes (0.15% of global emissions) – and Matosinhos “represented 1.7% of this national total”.

In other words, says Mr Morais in a column headed “Galp’s coup in Matosinhos”, the environmental benefit of a decision which syndicates suggest will affect as many as 1,500 jobs “will be residual!”

“The real reasons for the closure of the refinery will be others”, he insists. “GALP’s shareholders, the Amorim family and Isabel dos Santos, are looking forward to making thousands of millions from all this at the cost of the destruction of economic value and employment”.

According to Mr Morais, the prime site will become a focus for property speculation – although Matosinhos town council has already publicly vowed it will block any applications from GALP for ‘change of use’ of the land from industrial to residential.

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