The UK’s oldest and Scotland’s only oil refinery to be closed in the second quarter of 2025.
A statement from Franck Demay, CEO of Petroineos, reported that the closure was due to the decline of demand for “key fuels” that Grangemouth produced, forecasting a further decline in the fuel market with the move towards electric vehicles. However, it has also been reported that Grangemouth has been unable to compete with the more efficient refineries in Africa, the Middle East and Asia.
Petroineos had invested over $1.2bn since 2011 in order to maintain the safety of Grangemouth and over the same period lost $775m. The planned maintenance and continual repairs of the refinery consistently exceeded the company’s earnings.
The competition of the market and the cost of maintenance has prompted Petroineos to transform Grangemouth.
The refinery is planned to be broken down into different sectors. Petroineos is planning to create a hub for importing and distributing finished fuel to sustain the Scottish fuel industry.
The hub will be a fraction of the size of Grangemouth and it is expected that 400 of the 475 employees will be laid off over the next two years.
The Scottish and UK governments have jointly pledged £100m in the Falkirk and Grangemouth Growth Deal to create growth and expect an investment of £628m and 1,660 jobs created over the next 30 years.
Whilst Petroineos states that they will provide an 18-month redundancy package, hundreds of workers are to be impacted. Both governments pledge they provide employment support such as offering advice and training opportunities.
The governments in Wes in collaboration with Petroineos have also conducted Project Willow to seek alternative uses for the Grangemouth refinery.
A report published on 19 March, provided to the UK Government by EY, outlines nine possible long-term industrial options for the refinery.
These include plastics recycling, hydrogen production and other projects that could create up to 800 jobs by 2040.
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