Celtic Renewables Extends Deal for Green Chemicals from Whisky By-Products

Scottish biorefinery secures whisky waste supply until 2028

Celtic Renewables has extended its partnership with Rosebank Distillery for another three years. The Edinburgh-based green chemicals producer will continue converting pot ale from whisky production into bio-based chemicals at its Grangemouth biorefinery. Consequently, the agreement runs until at least 2028.

Rosebank Distillery sits less than four miles from the biorefinery in Falkirk. The proximity keeps transport costs low and reduces carbon emissions from collection. Ian Macleod Distillers, which owns Rosebank, previously supplied over 4,600 tonnes of pot ale during the initial three-year term.

The partnership turns a disposal problem into a commercial opportunity. Pot ale is a liquid residue left after whisky distillation. Distilleries typically use it for animal feed or send it to anaerobic digestion plants. Celtic Renewables converts it into acetone, butanol, and ethanol instead.

How whisky residues become household chemicals

Celtic Renewables uses a fermentation process called ABE technology. The system processes pot ale alongside draff, which is the solid grain residue from distilling, and rejected potatoes from agriculture. These feedstocks contain no food-grade material. Therefore, the process avoids competing with food production.

The biorefinery produces three main outputs. Bio-acetone goes into nail polish removers and paint thinners. Bio-butanol serves as a solvent in cosmetics and coatings. Bio-ethanol appears in cleaning products and personal care items. All three replace chemicals normally made from crude oil.

The company operates a commercial demonstrator facility on a 2.5-acre site in Grangemouth. Current capacity stands at around 400 tonnes of bio-chemicals annually. However, demand from the company’s 70 clients already exceeds this output. Manufacturers in pharmaceuticals, cosmetics, personal care, paints, and tyres use the materials.

The chemicals achieve carbon savings of more than 60% compared to fossil fuel equivalents. This figure comes from lifecycle assessment comparing production emissions. For manufacturers tracking Scope 3 emissions, switching to bio-based solvents cuts their supply chain carbon footprint substantially.

Grangemouth biorefinery expansion plans take shape

Celtic Renewables received £6.23 million from the Scottish Government in late 2024. This forms part of a £16.23 million funding package combining public and private investment. The money supports plans for a £120 million industrial-scale biorefinery at Grangemouth.

The new facility will operate at ten times current capacity. Production should reach approximately 5,000 tonnes of bio-chemicals each year by 2030. This expansion creates 149 jobs in science, technology, and manufacturing roles.

In November 2025, Celtic Renewables appointed Allen Associates as engineering consultancy for the project. Detailed design work is now underway. The larger biorefinery will process significantly more whisky by-products and agricultural waste from across Scotland.

Grangemouth has faced uncertainty following the closure of the Ineos refinery. The biorefinery project offers new industrial employment in an area transitioning away from fossil fuel processing. Moreover, it builds on existing infrastructure and skills in the region.

Scotland’s whisky industry generates substantial waste volumes

The Scottish whisky sector is worth approximately £4 billion annually. Distillation produces large quantities of pot ale and draff as unavoidable by-products. For every litre of whisky, distilleries generate roughly ten litres of pot ale and three kilograms of draff.

Traditionally, distilleries gave pot ale to local farmers for animal feed. Some distilleries use anaerobic digestion to produce biogas. Both methods have value, but neither creates high-value products. In addition, anaerobic digestion generates methane emissions if not carefully managed.

Celtic Renewables offers a third option. The company pays distilleries for their pot ale, turning a disposal cost into a revenue stream. This model works particularly well for distilleries near the Grangemouth facility. Transport costs rise quickly over distance, so local partnerships make commercial sense.

Neil Bulloch, Distillery Manager at Rosebank, explained the business logic. Working with Celtic Renewables helps the distillery manage liquid waste sustainably. It also reduces environmental impact across Ian Macleod Distillers’ operations. The partnership supports broader sustainability commitments within the company.

Several whisky producers have set net zero targets for 2040. Managing by-products forms part of these strategies. Other distilleries are exploring different approaches, including microalgae cultivation trials. However, chemical production at commercial scale remains relatively rare.

Bio-based chemicals reduce fossil fuel dependency in supply chains

Manufacturers face growing pressure to cut carbon emissions throughout their supply chains. Regulations like the EU’s Corporate Sustainability Reporting Directive require detailed Scope 3 disclosures. Many large retailers now ask suppliers about their carbon footprint before awarding contracts.

Switching from petroleum-derived solvents to bio-based alternatives offers measurable reductions. A cosmetics manufacturer using bio-acetone in nail polish can document lower emissions per product. Similarly, paint producers using bio-butanol reduce the carbon intensity of their formulations.

The chemicals function as drop-in replacements. Manufacturers do not need to reformulate products or change production equipment. Bio-acetone behaves identically to fossil acetone in manufacturing processes. This compatibility removes a significant barrier to adoption.

Celtic Renewables supplies samples and technical data to help clients verify performance. The company works with brands to quantify carbon savings for their sustainability reporting. This support helps manufacturers justify the switch to procurement teams focused on cost control.

Consumer demand for sustainable products continues to grow. A 2024 survey found that 68% of UK consumers consider environmental impact when buying household goods. Products labelled as containing bio-based ingredients can command premium pricing in some categories. Therefore, using these chemicals offers both environmental and marketing benefits.

Circular economy principles turn waste into economic value

The partnership demonstrates circular economy thinking in practice. Pot ale previously had limited economic value. Celtic Renewables converts it into chemicals selling at prices competitive with fossil equivalents. This transformation creates value from material that would otherwise generate disposal costs.

The model benefits multiple parties. Distilleries reduce waste management costs and improve their sustainability credentials. Celtic Renewables secures reliable feedstock supply close to its facility. Manufacturers gain access to low-carbon materials for their products. Consumers can buy household goods with smaller environmental footprints.

Scotland’s bio-economy strategy emphasizes exactly this type of innovation. The Scottish Government wants to maximize value from agricultural and industrial residues. Converting whisky by-products into chemicals aligns with national economic development priorities. It also supports rural employment by creating markets for agricultural waste like rejected potatoes.

Replicating the model elsewhere faces some challenges. The economics depend on proximity between feedstock sources and processing facilities. Transport costs rise quickly when hauling liquid waste over long distances. Consequently, biorefinery projects work best in regions with concentrated whisky production or similar industries.

Other countries with large-scale brewing or distilling could adopt similar approaches. Ireland, Japan, and the United States all have substantial whisky or spirits industries. Agricultural by-products like potato waste exist globally. However, each region needs sufficient feedstock density to justify capital investment in processing facilities.

What the partnership extension means for UK businesses

The renewed agreement signals growing commercial viability for bio-based chemicals. Celtic Renewables secured a three-year extension because the partnership delivers value to both parties. Rosebank gets reliable waste management. Celtic Renewables gets consistent feedstock supply. This mutual benefit suggests the model can scale.

For procurement teams, the partnership demonstrates that sustainable alternatives are becoming mainstream. Bio-acetone and bio-butanol are no longer experimental materials. They are available at commercial scale with documented performance and carbon credentials. Buyers can specify them in tenders without technical risk.

Supply chain managers should note the carbon reduction figures. A 60% saving compared to fossil equivalents is substantial. For companies reporting under SECR or preparing for mandatory climate disclosures, switching solvents offers quantifiable emission cuts. These reductions appear in Scope 3 calculations, which often represent the largest share of total emissions.

The expansion plans matter because they address supply constraints. Current production cannot meet demand from existing clients. The new biorefinery will increase availability significantly. Consequently, more manufacturers will be able to access bio-based chemicals without long lead times or allocation limits.

Businesses tendering for public sector contracts should pay attention. Procurement Policy Note 06/21 requires suppliers to publish carbon reduction plans. Using lower-carbon materials strengthens these submissions. Similarly, companies pursuing science-based targets need strategies to reduce supply chain emissions. Material substitution offers one of the clearest pathways.

Key details about the Celtic Renewables partnership

• The partnership between Celtic Renewables and Rosebank Distillery has been extended for three years, running until at least 2028.
• During the initial term, Rosebank supplied over 4,600 tonnes of pot ale, which Celtic Renewables converted into approximately 500 tonnes of bio-based chemicals annually.
• The bio-chemicals achieve carbon savings exceeding 60% compared to fossil fuel-derived equivalents, supporting Scope 3 emissions reductions for manufacturers.
• Celtic Renewables plans to build a £120 million industrial-scale biorefinery at Grangemouth, supported by £6.23 million from the Scottish Government and additional private investment.
• The new facility will operate at ten times current capacity and create 149 jobs in science, technology, and manufacturing by 2030.
• The company currently serves 70 clients across pharmaceuticals, cosmetics, personal care, paints, and tyres, with demand already exceeding current production capacity.

Scaling bio-based chemical production in Scotland

Celtic Renewables faces a common challenge for green technology companies. Demand exists, but scaling production requires significant capital. The £120 million biorefinery represents a substantial investment. Success depends on securing long-term feedstock agreements and customer commitments.

The Rosebank partnership provides one anchor supply contract. Celtic Renewables will need similar agreements with other distilleries to feed a facility ten times larger. Scotland has over 130 operational distilleries, so feedstock availability should not be a constraint. However, negotiating collection logistics and pricing takes time.

Customer contracts are equally important. Manufacturers want supply security before reformulating products or changing procurement specifications. Celtic Renewables must demonstrate it can deliver consistent quality and volume. The company’s track record with 70 existing clients helps, but scaling requires expanding the customer base substantially.

The 149 jobs projected for 2030 include process engineers, laboratory technicians, and quality control specialists. These roles require skills in biotechnology, chemical engineering, and industrial operations. Training programs will likely be necessary to build the required workforce. SBS Academy delivers training on sustainability topics that may become relevant as the bio-economy grows.

Grangemouth’s industrial heritage provides advantages. The site has existing utilities, transport links, and a workforce familiar with chemical processing. Repurposing industrial land for bio-based production fits the just transition narrative. Communities want replacement jobs as fossil fuel industries decline.

Implications for businesses tracking supply chain emissions

Companies preparing for mandatory climate reporting should consider how material choices affect their carbon footprint. Solvents, acetone, and butanol appear in thousands of products. Switching to bio-based versions cuts emissions without changing product performance.

For example, a cosmetics company using 50 tonnes of acetone annually could save approximately 100 tonnes of CO2 equivalent by switching to bio-acetone. This assumes the 60% reduction figure holds across the full lifecycle. Such savings contribute directly to Scope 3 targets, which cover purchased goods and services.

The calculation becomes more complex when considering transport emissions and feedstock sourcing. However, Celtic Renewables provides lifecycle assessment data to help clients model the impact. This documentation supports carbon accounting and external reporting requirements.

Businesses should also consider reputational benefits. Using whisky by-products to make cosmetics or household cleaners creates a compelling sustainability story. Marketing teams can explain the circular economy approach in terms consumers understand. This narrative works particularly well for Scottish brands or companies emphasizing local sourcing.

Procurement teams negotiating with Celtic Renewables should ask about supply security during the transition to the new biorefinery. Current capacity constraints mean some potential customers face waiting lists. Understanding the timeline for expanded production helps with planning. Similarly, locking in pricing before capacity increases may offer advantages.

Tender responses for public sector contracts can highlight the use of bio-based materials. Our net zero program supports businesses preparing carbon reduction plans for PPN 06/21 compliance. Material substitution forms part of credible decarbonization strategies.

Whisky industry sustainability commitments drive demand

The Scotch Whisky Association published a net zero roadmap targeting 2040. Member distilleries committed to cutting emissions across production, packaging, and distribution. By-product management features prominently in these plans.

Distilleries historically used pot ale and draff for animal feed, receiving minimal value. Some larger operations invested in anaerobic digestion plants to generate biogas. However, these systems require capital and ongoing management. Selling pot ale to Celtic Renewables offers an alternative that generates revenue rather than requiring investment.

Ian Macleod Distillers operates several distilleries beyond Rosebank. The company’s sustainability strategy emphasizes waste reduction and circular economy partnerships. Working with Celtic Renewables aligns with these commitments while providing a practical solution for liquid waste management.

Other distillers are watching the partnership’s development. If the model proves commercially successful, similar agreements may emerge. Distilleries located near Grangemouth have a geographic advantage due to lower transport costs. However, Celtic Renewables has indicated interest in establishing collection networks across Scotland as the new biorefinery comes online.

The whisky sector’s reputation matters to sustainability-conscious consumers. Highlighting partnerships that turn waste into useful products strengthens brand positioning. Distilleries can communicate environmental responsibility through tangible actions rather than general commitments.

Resources for businesses exploring bio-based materials

The Scottish Government’s bio-economy strategy provides context for policies supporting companies like Celtic Renewables. The strategy is available on the Scottish Government website and outlines priorities for developing bio-based industries.

Companies wanting to understand bio-based chemical options should review the Celtic Renewables website, which includes technical specifications and case studies. The site explains the ABE fermentation process and lists applications for their chemicals.

The Scotch Whisky Association publishes industry sustainability data through its annual reports. These documents provide context about waste volumes and environmental initiatives across the sector.

For businesses considering circular economy approaches, the Zero Waste Scotland website offers guidance on waste valorization and resource efficiency. The organization provides tools and case studies relevant to manufacturing and food production.

Companies needing support with carbon reporting and ESG compliance can access resources explaining Scope 3 emissions and supply chain carbon accounting. Understanding these frameworks helps businesses identify where material substitution offers the greatest impact.