Petroineos announce closure of Grangemouth oil refinery

The Grangemouth plant is to close after Petroineos, the joint venture between Ineos and PetroChina, announced losses in excess of $775million.

The site will cease refining oil during the second quarter of 2025, according to an announcement today, with around 400 jobs estimated to be lost.

The refinery is a huge employer of Wee County workers and the wider Forth Valley area, with the news coming as the final nail in the coffin following threats of closure spanning months.

Frank Demay, chief executive officer at Petroineos Refining, confirmed the closure, citing a loss of demand for key fuels.

He 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.”

Initially announcing plans to close last November, the site was to be transformed into a finished fuels import terminal and distribution hub.

LOST: The Grangemouth refinery has been under threat of closure since November. (Image: PA)

However, this would require "significantly fewer people to operate” with the company now  entering into a formal redundancy process with employee unions.

It is expected that Petroineos will look to slash their workforce to just one-fifth of its current size, meaning the loss of 400 jobs in the area.

Alloa and Grangemouth Labour MP Brian Leishman branded the development “devastating”, and added that the closure will “be felt far beyond Grangemouth”.

In a speech at Westminster, he said: “Over the last few months, the campaign to keep Grangemouth working has spread the message of extending the life of the refinery, of investing in the workforce and making sure there is no gap that would make the workers lose their jobs.

“I have stood in solidarity with the workers and I will continue to do.

“Unite the Union have said it does not accept that the future of the refinery should have been left to the whims of shareholders and I completely agree.

“Energy security is intrinsically linked to national security and for both to be in the hands of a foreign government and private capital is inherently wrong, not to mention utterly reckless.

“The primary ideal of the Keep Grangemouth Working campaign was to extend the life of the refinery, so that a truly just transition could be achieved.

“That is what should happen and nothing will convince me otherwise.”

SPEECH: Brian Leishman MP slammed the decision at Westminster. (Image: Parliament TV)

Mr Leishman also highlighted the “enormous” impact the closure will have on the community, adding both the UK and Scottish governments will need to work together on the issue, and quickly.

The MP continued: “The workers in Grangemouth community need action – action that leads to us creating something truly transformative and world leading.

“Sustainable aviation fuel, low carbon hydrogen, clean E-fuel – let’s not rule anything out of the equation for the Grangemouth site.

“But we must act quickly because time is of the essence.”

His words were echoed by Keith Brown, MSP for Clackmannanshire and Dunblane, and deputy leader of the SNP.

Mr Brown said: “This is a hugely disappointing decision by Petroineos which will impact the workforce – many of whom live in Clackmannanshire.

“I understand that both the Scottish and UK governments are working together to ensure that workers receive support to find alternative employment and that a joint package of investment of £100million will help to ensure the long-term future of the Grangemouth site.”

The decision to close the refinery has been met with backlash from Unite the Union, who had been representing workers under threat of redundancy since late last year.

Derek Thomson, Scottish secretary for Unite, slammed the announcement and committed to protecting the workers impacted.

He said: “The sole objective for Unite remains that the jobs at the refinery and thousands more in the supply chain are protected by any means.

“Unit does not accept that the future of the refinery should have been left to the whim and avarice of shareholders.

SLAMMED: Unite the Union has pledged its commitment to protecting workers affected. (Image: PA)

“The complex is critical to the nation’s manufacturing base and energy security. The governments involved cannot simply hide behind the convenient smokescreen that this is a commercial decision which they couldn’t influence.”

Over the last few months, a joint venture from both the Scottish and UK governments invested funding into Project Willow, designed to explore ways the site can be transformed into a clean energy hub.

The initiative received a total of £1.5m in funding announced last July, with both governments also pledging support into an investment plan to help secure Grangemouth’s industrial future.

This entails a £100m package, including £20m in joint funding on top of the £80m for the Falkirk and Grangemouth Growth Deal.

The grants from both governments are expected to deliver over £628m in economic benefits, with an employment impact of 1660 net jobs across the Falkirk Council area.

Both governments will provide tailored support to help affected workers in finding new employment.

Gilliam Martin, cabinet secretary for Net Zero and energy, said: “My immediate thoughts are with the workforce.

“This is a very challenging time for them and their families, and we will support every worker affected by this decision.

“We are working very closely with the UK Government and together we have community our disappointment to Petroineos today.

“The Scottish Government has consistently made clear our preference was for refining to continue as long as possible, and we have continued to press the shareholders for a positive decision until the eleventh hour.

“This significant package of support combines immediate help for affected workers and long-term contribution to ensure that Grangemouth continues to thrive in the future.

“We are clear that there should be a just transition for the refinery site and we remain committed to bringing forward low carbon opportunities that will sustain skilled jobs across the wider area for many years to come.”