Grangemouth closure leaves Scotland without a single oil refinery

Scotland’s only oil refinery, located in Grangemouth, is set to close by the summer of 2025, leading to the loss of around 400 jobs. The refinery, operated by Petroineos, has struggled to remain competitive in the global market, particularly against newer, more efficient sites in Asia, Africa, and the Middle East. The closure is part of the company’s strategy to adapt to shifting energy demands as the world moves away from fossil fuels. 

Petroineos has stated that the aging refinery, which opened in 1924, has become financially unsustainable, with daily losses of around $500,000 (£383,000). The company projects total losses of $200 million (£153 million) by the end of 2024. With the demand for traditional fuels like petrol and diesel declining, especially in light of upcoming bans on new petrol and diesel vehicles, Petroineos decided that continuing operations was no longer viable. The closure marks the end of an era for a refinery that has been a major player in Scotland’s energy infrastructure for nearly a century. 

To mitigate the impact of the closure, Petroineos plans to convert the site into a fuel import terminal. This facility will focus on importing petrol, diesel, aviation fuel, and kerosene into Scotland, ensuring continued access to these fuels while significantly reducing the workforce. The terminal will employ fewer than 100 people, a sharp decline from the current workforce of 475, marking a significant reduction in jobs. 

The closure has triggered widespread concern among workers and unions. Employees have expressed frustration over the decision, with many feeling that more could have been done to keep the refinery open or to extend its operations during the transition. Chris Hamilton, a plant operator at Grangemouth, described the closure as a “kick in the teeth,” particularly as the site has long been a cornerstone of the local economy and job market. 

Union leaders have voiced their dissatisfaction with both the Scottish and UK governments, accusing them of failing to protect workers and industries dependent on fossil fuels during the transition to cleaner energy. The refinery’s closure is expected to affect not only the 400 workers directly employed at the site but also potentially around 3,000 additional jobs linked to the wider supply chain, according to Unite. 

In response, both governments have announced a £100 million joint investment plan aimed at supporting local energy projects and exploring potential new uses for the Grangemouth site. This includes Project Willow, a feasibility study investigating whether new green industries could be established at the site to provide long-term employment opportunities. However, many are concerned that these efforts will not materialize quickly enough to save the jobs at stake. 

The closure of the Grangemouth refinery is part of a broader shift in the global energy market as demand for fossil fuels continues to decline. The refinery, which supplies 65% of Scotland’s refined oil products and accounts for around 14% of the UK’s total refining capacity, has been central to Scotland’s energy infrastructure for decades. However, with the world moving towards renewable energy and the eventual phasing out of petrol and diesel vehicles, Petroineos determined that maintaining the aging facility was no longer economically feasible.  

The planned transformation of the site into a fuel import terminal is intended to safeguard Scotland’s fuel supply in the short term. Petroineos expects the terminal to be operational by the summer of 2025, and while it will require a smaller workforce, it represents a step towards adapting to the new energy landscape. Nonetheless, the loss of jobs and the uncertainty surrounding the future of the site have left many in the local community feeling uneasy about what lies ahead.