Grangemouth refining to stop next year with 400 jobs lost

GRANGEMOUTH refinery in Scotland will cease refinery operations in the second quarter of 2025 with the loss of 400 jobs.  

Refinery owner Petroineos announced in November that it was considering converting the site into a fuels import terminal. Today it confirmed the move, saying 400 of 475 workers are expected to lose their jobs because a terminal requires fewer people to operate it.

The workers union Unite offered a scathing response, noting that staff are furious that bosses and politicians have failed to secure the future of the site.

Unite general secretary Sharon Graham said: “This is an act of industrial vandalism, pure and simple.”

The union is arguing that the Grangemouth complex, which also produces petrochemicals, is a strategically important piece of economic infrastructure. It estimates that as the sole oil refinery in Scotland it provides 4% of the country’s GDP and 8% of the nation’s manufacturing base.

Five refineries left

Refinery operator Petroineos, which is a joint venture between Ineos and PetroChina, said the high annual maintenance costs required to keep the 150,000 bbl/d refinery operating have led to losses exceeding US$775m since 2011. On top of this, it said the site is unable to compete with larger, modern, more-efficient refineries in the Middle East, Asia, and Africa.

Frank Demay, CEO of Petroineos Refining, said: “The energy transition is happening now, and it is happening here. Demand for key fuels we produce at Grangemouth has already started to decline and, with a ban on new petrol and diesel cars due to come into force within the next decade, we foresee that the market for those fuels will shrink further. That reality, aligned with the cost of maintaining a refinery built half a century ago, means we are exploring ways to adapt our business.”

He added that the company will now begin consulting with staff representatives about the terms of redundancy.

Derek Thomson, Unite Scottish secretary said: “The sole objective for Unite remains that the jobs at the refinery and thousands more in the supply chain are protected by any means…The complex is critical to the nation’s manufacturing base and energy security.”

The refinery is one of only six left in the UK, down from 12 in 2000.

Project Willow low-carbon hub

John Swinney, Scotland’s first minister, said he is deeply disappointed by the decision and will work with the UK government to deliver a £100m (US$131m) investment plan to support workers and kickstart greener industries in the region.

This includes £80m for new projects including a bioeconomy plant to use waste whisky and food to produce chemicals; and a £9m technology centre to help companies adopt greener processes and produce cleaner products.

Petroineos said while it prepares to change the refinery site to an import terminal it is working with the UK and Scottish government to analyse options for Grangemouth to host a low-carbon manufacturing hub. It said an initial feasibility study, known as Project Willow, is assessing various low-carbon opportunities from technical, economic, commercial, regulatory, environment, community, and skills perspectives.

Shortlisted options include producing sustainable aviation fuels, low carbon hydrogen, and fuels produced through electrification. The project team is now carrying out a detailed assessment of the viability of each option, the company said.

Elizabeth de Jong, CEO of Fuels Industry UK, said: “We are very sad to hear that Grangemouth refinery is planning to become a fuels import terminal. As we have told government, the fuels sector is vital for the nation’s energy security and net zero ambitions but faces difficult investment conditions in the UK as this decision shows. Today’s announcement must be a wake-up call for government to work more closely with us and our member companies to address the long-term challenges facing the sector.”

The news continues what is proving an incredibly tough week for UK workers in heavy industry following yesterday’s announcement by Tata Steel that despite a £500m government investment in green steel production more than 2,000 jobs will go at the Port Talbot works, alongside rumours that British Steel could imminently announce the closure of its blast furnace in Scunthorpe.