Scotland’s only oil refinery to shut with hundreds of jobs at risk at Grangemouth

Hundreds of jobs are expected to be lost as Grangemouth Refinery prepares to close down.

The only operating crude oil refinery in Scotland, and one of only six remaining in the UK, supplies 80% of the country’s fuel.

The refinery in Falkirk is responsible for 4% of Scotland’s GDP and approximately 8% of its manufacturing base.

Refinery operations are expected to cease in under 18 months in spring 2025.

Owners Petroineos, a joint venture between PetroChina and INEOS, said the site would become an import and distribution hub.

Unite the union said it would work with both the Scottish and UK governments to save jobs.

“The news will come as a shock to the local community but Unite is going to do everything it can to protect jobs in this vital industry,” the Unite’s Scottish secretary told STV News.

“It could mean a transfer over to different parts of the business but just now it’s too early to go into the details.

“We need more proposals and we want to work with the Scottish Government and the UK Government to come to some sort of conclusion as to where this will end up.”

The business said demand for the fuels it produces was expected to decline and that the energy transition was well under way.

Following a busy period brought on by the war in Ukraine, Petroineos said it faced a future of “unsustainable levels of losses”.

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STV News understands Petroineos spoke with the Scottish Government and unions on Tuesday after briefing staff earlier in the day.

In an email to staff, refinery manager Russell Mann said: “We anticipate that works necessary for import flexibility at Finnart and Grangemouth will take around 18 months to complete and our current intention is to continue refinery operations until Spring 2025, and potentially beyond.”

Mr Mann said plans to transition Grangemouth to an import terminal had been ongoing with shareholders for months.

“We will shortly begin work to modify our infrastructure so we can, if necessary, operate as a fuel import and distribution terminal at Grangemouth,” he said.

“This investment will future-proof our business, enhance the site’s resilience, and secure our status as a national fuel hub for decades to come.”

Staff were due to be told on the completion of 2023’s TAR programme – Petroineos’ project and planned shutdowns.

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But issues with this has resulted in delay and the company said it “cannot delay work on import logistics any longer”.

Mr Mann said the message to staff “marks the start of a regular programme of engagement with all colleagues on the changing nature of our business”.

In September, Ineos Grangemouth CEO Andrew Gardner told STV News closing down all together is not a viable solution.

It is Scotland’s largest industrial site, employing almost 2,000 people directly across three businesses, and up to 7,000 contractors at peak turnaround activity.

In 2019, exports of petroleum and chemical products from the site accounted for 6% of all Scottish exports to outside of the UK.

Grangemouth: Icon of Scottish manufacturing

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The billowing smoke from the chimneys of the Grangemouth oil refinery has been a landmark for decades.

The industrial site, which is now operated by Petroineos, was built in the 1920s. Generations of families from the Falkirk area and beyond have worked here – meaning a move towards net zero is the talk of the town.

Grangemouth is one of the most deprived towns in the Falkirk area, and with the news there’s going to be changes at some of its biggest employers, its leaving concerns about businesses here about what the future holds.

Grangemouth has become synonymous with its industrial site, which has produced fuel for Scotland and beyond for almost a century.

But the town’s biggest employer – and polluter – operated by petrochemicals giant Ineos, has been under the spotlight for its green credentials.

The Scottish Government has been looking at how to decarbonise the industry, without sacrificing jobs.

In a statement in September, the Scottish Government said Grangemouth would play a key roll in decarbonising industry, and it was working closely with the site and the community to make sure they have a say in the town’s future.