Thousands of jobs lost in UK heavy industry

Tata Steel and Grangemouth closures come amid decarbonisation shift

ALMOST 3,000 jobs are set to be lost in UK heavy industry as decarbonisation begins to bite. Tata Steel is shutting down Port Talbot’s last remaining blast furnace with the loss of 2,500 jobs as it accepts £500m (US$651m) of state investment for greener electrified production requiring fewer staff. Meanwhile, 400 jobs are confirmed to go at Grangemouth next year as refining operations make way for fuel imports.

The September announcements followed in quick succession and were joined by rumours that British Steel is set to imminently announce the closure of the UK’s sole remaining blast furnace in Scunthorpe.

Grangemouth to cease refining

Refinery owner Petroineos, a joint venture between Ineos and PetroChina, said refining operations will cease in the second quarter of 2025. Of the 475 staff that work at the refinery, 400 are expected to lose their jobs as the fuels import terminal that it will be converted to requires fewer people to run it.

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.”

Petroineos 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, and that the site is unable to compete with larger, modern, more-efficient refineries in the Middle East, Asia, and Africa.

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

Sharon Graham, general secretary of the workers union Unite, 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.

Project Willow low-carbon hub

John Swinney, Scotland’s first minister, said he 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.

Chemicals jobs at risk

While Ineos has said its businesses making chemicals at the site and the Forties pipeline system that delivers oil and gas from the North Sea are largely unaffected by the refinery closure, a think tank has warned that tens of thousands of jobs in UK chemicals are at risk due to lagging decarbonisation policy.

The sector is responsible for around 19% of the UK’s industrial emissions and is heavily reliant on fossil fuels for energy and feedstocks, but also underpins the production of cleaner technologies including batteries and wind turbines needed for greener growth.

Liam Hardy, senior policy analyst at Green Alliance, said: “We need a UK chemicals industry, the highly skilled jobs it provides, and the contribution it will make to a greener economy.

But it will take deliberate government policy to find a way forward. For example, by requiring a certain amount of carbon in chemicals to come from greener sources through a ‘green carbon mandate’.”

While the UK government has pledged £20bn in funding for carbon capture and storage projects to help reduce industrial emissions, and £240m for switching to hydrogen fuel, Green Alliance warns that other policies essential to a greener chemicals industry are lagging behind. It says the UK government doesn’t adequately support electrification of industry and that the country’s industrial electricity prices are consistently higher than the EU average. In 2022, UK prices were at a 23% premium.

On top of this, the complexity of the sector means policymakers struggle to understand it and the industry sometimes fails to provide a unified voice.

Hardy added that the government’s forthcoming industrial strategy is a key moment for setting out a plan for “a thriving green chemical industry fit for the future”.