Grangemouth Refinery Closure: Scotland's Last Oil Plant to Shut in 2025

Scotland's industrial landscape is set to undergo a significant transformation as the country's last remaining oil refinery at Grangemouth prepares to cease operations in the summer of 2025. This decision, announced by Petroineos, the joint venture between PetroChina and Ineos, will result in the loss of 400 jobs and marks a pivotal moment in Scotland's energy transition.

The closure of Grangemouth refinery, established in 1924, is partly attributed to the declining demand for fossil fuels and the UK government's plan to ban the sale of new petrol and diesel cars by 2035. This move aligns with Britain's efforts to achieve net-zero emissions targets but has sparked controversy among politicians and union leaders.

Frank Demay, CEO of Petroineos, explained the decision, stating:

"The energy transition is happening ... That reality, aligned with the cost of maintaining a refinery built half a century ago, means we are exploring ways to adapt our business."

The announcement has drawn criticism from various quarters. Ed Miliband, the Energy Secretary, expressed deep disappointment, while Sharon Graham, general secretary of Unite union, labeled it an act of "industrial vandalism." The closure has also created tension between Labour and its union supporters.

Grangemouth's significance extends beyond fuel production. The 1,700-acre site, Scotland's largest industrial complex, contributes 4% to Scotland's GDP and 8% to its manufacturing base. It currently employs 2,000 people directly and supports up to 5,000 contractors.

The refinery's closure will have far-reaching implications for Scotland's fuel supply. Grangemouth produces 80% of Scotland's fuel, including petrol, diesel, heating oil, and aviation fuel. It also serves markets in northern England and Northern Ireland. Post-closure, the site is expected to transition into an import terminal, bringing in fuels refined abroad.

Despite the closure, there are plans to explore the site's potential as a low-carbon fuels manufacturing hub. Petroineos is working with UK and Scottish governments to analyze options for this transition. The company is also seeking training and other opportunities for affected workers.

The Grangemouth Future Industry Board, co-chaired by Ed Miliband and including representatives from local industry, trade bodies, and unions, will meet to discuss the next steps for the site and its workforce.

As Scotland bids farewell to its last oil refinery, the closure of Grangemouth symbolizes the ongoing shift in the global energy landscape. The challenge now lies in balancing the transition to cleaner energy sources while safeguarding jobs and maintaining economic stability.