Scotland’s only oil refinery to cease operations by 2025

Its owners Petroineos said the site will become a fuel import terminal.

Pa Scotland Reporters
Wednesday 22 November 2023 13:25 GMT
The Grangemouth refinery is to become a fuel import terminal (PA)
The Grangemouth refinery is to become a fuel import terminal (PA)

Scotland’s sole oil refinery is to cease operations in 2025, its owners have announced.

Petroineos, which owns the plant at Grangemouth, said it will become a fuel import terminal.

The company said in a statement: “The timescale for any operational change has not yet been determined but the work will take around 18 months to complete and the refinery is therefore expected to continue operating until spring 2025.”

The firm said the site “faces significant challenges due to global market pressures and the energy transition”.

Petroineos said around 500 workers are employed at the site and a number of employees will remain following the move to an import-only terminal.

Trade union Unite has said it will “leave no stone unturned” in its fight to save jobs at Grangemouth.

Franck Demay, chief executive at Petroineos Refining, said: “This does not change anything for our operation today, where it is business-as-usual at the Grangemouth refinery.

“We currently anticipate continuing refinery operations until spring 2025.”

He added: “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.

“As a prudent operator, we must plan accordingly but the precise timeline for implementing any change has yet to be determined.

“This is the start of a journey to transform our operation from one that manufactures fuel products, into a business that imports finished fuel products for onward distribution to customers.

“Throughout this process, our focus will remain on the safe production and reliable supply of high-quality fuels to our customers in Scotland, the north of England and Northern Ireland.

“As we start to make this investment in preparing for a future transformation, we are equally committed to a regular programme of engagement with our colleagues about the changes we are making to our business.”

The firm is also currently assessing a number of green opportunities for the site, it has said, including a bio-refinery.

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

“Unite will leave no stone unturned in the fight for jobs and will hold politicians to account for their actions.”

Derek Thomson, the union’s Scottish secretary, said: “Unite continues to engage with Petroineos and we urge other stakeholders such as the Scottish and UK governments to do the same due to the implications that this proposal will have for the economies of the devolved and reserved administrations.

“Every option must be on the table in order to secure the hundreds of highly skilled jobs based at the Grangemouth complex for the long-term.”

The announcement should act as a “huge wake-up call” to politicians across the UK, according to the GMB union.

“This is a deeply worrying time for the future of the workers and communities dependent on Grangemouth,” said Gary Smith, the union’s general secretary.

“Time and again, GMB has said the UK needs a plan and not bans for better energy independence and prosperity.

“Today’s announcement should be a huge wake-up call to policymakers across the political spectrum.”

The Scottish Conservatives described the situation as “devastating” for Grangemouth refinery staff and a “hammer blow” for the national and local economies.

Douglas Lumsden, the party’s net-zero spokesman, said the “hostile attitude” shown by the Scottish Government and the UK Labour Party towards oil and gas “will have been a factor” in the decision, although it is unclear if this is the case.

“They all fail to recognise the need for oil and gas – such as the refinery at Grangemouth – to be part of Scotland and the UK’s energy mix for years to come,” he said.

“Instead, the highly skilled workforce at Grangemouth have been delivered the worst possible news at a difficult time. The SNP-Green Government must act now.

“We have requested an urgent statement from ministers today in the Scottish Parliament to outline what this will mean for workers and what decisive action will be taken to support them.”

Scottish Green MSP Gillian Mackay is calling for an “urgent summit” on the issue, saying: “This is an appalling way to treat workers who only months ago were being promised that they would be part of a just transition for the site. Instead they are being told their jobs are at risk just weeks before Christmas.

“Sir Jim Ratcliffe and his executives must explain themselves to the community that has for 100 years worked and loyally supported this site, and fully expected a better and more sustainable future that would support generations more.

“I grew up less than 200 yards from the plant and I can tell you right now that workers at the plant are bewildered, betrayed and furious at finding out about this from a story on the internet long after shareholders were made aware.

“They have been given next to no information – in fact, I broke the news to one senior union official.”

Scottish Liberal Democrat economy spokesman Willie Rennie called on the UK and Scottish governments to “step up”.

He said: “This is a dark day for the workers at Grangemouth.

“If the ‘just transition’ is to be more than just a slogan, it must deliver a future for the workers and for the Grangemouth site.

“The Scottish and UK governments must step up now.”

While Friends of the Earth Scotland said staff “deserve better than how they have been treated today by rich bosses in distant board rooms”, blaming the Scottish Government for its failure to “put concrete transition plans in place with workers”.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in