Grangemouth oil refinery set to shut as early as spring 2025 as hundreds of jobs at risk

An email was sent to staff on Tuesday outlining the closure plans for the local Petroineos facility.

The facility, which is Scotland’s only remaining oil refinery, is responsible for four per cent of Scotland’s GDP, meaning its closure would loom as a significant economic blow for the country.

Under the plans, the facility which is a joint venture between Ineos and PetroChina would be converted into an import terminal.

The company confirmed the refinery is expected to continue operating until spring 2025. A timescale for operational change has not yet been determined but the work to transform the site into an import terminal will take around 18 months to complete.

In a statement on the decision, Petroineos said Grangemouth has been “a vital piece of national infrastructure for the past century” but it faces “significant challenges due to global market pressures and the energy transition”.

It says that the investment will provide greater operational flexibility and will “safeguard the site as a national fuel hub for decades to come”.

Preparatory work, which Petroineos is looking to commence, will make it possible to import petrol, diesel, aviation fuel and kerosene into Scotland from vessels arriving in the Firth of Forth. The company is also looking to progress work to enable the conversion of its existing export terminal at Finnart on the Firth of Clyde, which is linked to Grangemouth by cross-country pipelines, into a diesel import facility. The new infrastructure would give Petroineos the means to import finished fuels for onward distribution to customers around the country.

Franck Demay, chief executive officer 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.

"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.”

The statement added that the film is “equally committed” to a regular programme of engagement with its employees about the changes being made to the business. The firm said it is also currently assessing a number of green opportunities for the site including a bio-refinery.

The news has raised concerns over the impact on the hundreds of workers currently employed at the facility.

Responding to news of the plans, Unite the Union said it continues to engage with Petroineos and is urging other stakeholders such as the Scottish and UK governments to do the same.

Sharon Graham, Unite general secretary, 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, Unite Scottish secretary, added: “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.”

A spokesperson for Falkirk Trades Union Council said: “This is a bitter blow for the workers at this plant and for the economies of the Falkirk and Grangemouth areas. It is vital that the company engages fully with the trade unions at the plant to fully examine all options available for the future of the workforce.”

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

"The intention to transition from domestic production to a fuel import terminal poses serious questions about the UK's energy security. It will also cause real concern for the wider UK energy and manufacturing sectors.

"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 news is likely to have a big impact on the local area and economy. Speaking on Wednesday afternoon, Councillor Cecil Meiklejohn, leader of Falkirk Council said: “We note the Petroineos statement on transforming the refinery into a fuels import terminal and will continue to engage with the company to fully understand how this may impact the workforce, Grangemouth and the wider Falkirk area.”