Grangemouth to cease refining operations as ‘major questions’ asked

Doubts cast over just transition and fuel security

GRANGEMOUTH refinery in Scotland could cease operations in 2025 and become a fuel import terminal or host a biorefinery, its owner Petroineos has announced, putting hundreds of jobs at risk.

Grangemouth is Scotland’s sole refinery, and one of only six in the UK, down from 12 in 2000. The refinery, which is part of a larger complex run by Ineos that also produces petrochemicals, employs around 400 people. It’s thought only 100 workers would be needed to run a fuels terminal.

The company has said that the timescale for any operational change at the 150,000 bbl/d refinery will be around 18 months, meaning operations could cease as early as 2025.

Ineos is looking at low-carbon options for Grangemouth including whether it will host a biorefinery. Franck Demay, CEO of Petroineos Refining, said: “As the energy transition gathers pace, this is a necessary step in adapting our business to reflect the decline in demand for the type of fuels we produce.”

It will also work to convert its existing export terminal at Finnart on the Firth of Clyde, which is linked by pipeline to Grangemouth, into a diesel import facility.

UK refineries produce just 55% of the diesel used in the country with the rest imported, while the UK produces 40% more petrol than is consumed.

A report published last year by the Competition and Markets Authority (CMA) warned that the UK faces stiff competition from abroad as refining capacity in Asia increases and rising electric vehicle sales add further pressure.

Sharon Graham, general secretary of the Unite union, said: “This proposal clearly raises concerns for the livelihoods of our members but also poses major questions over energy supply and security going forward.”

The Department for Energy Security and Net Zero said it is seeking assurances on how Ineos will support employees but that it remains confident on fuel security.