Closure of Grangemouth oil refinery set to go ahead by middle of next year with 400 job losses

Petroineos has confirmed its intention to cease refinery operations at Grangemouth during the second quarter of 2025, the Evening News’ sister paper The Scotsman reported. with 400 jobs to go over the next two years.

The closure plans were first announced in November last year, with plans to switch the site to a fuel import and export terminal and distribution hub. But union leaders had hoped the facility could remain open long enough to establish a green alternative at the site.

Grangemouth is set to close by the middle of next yearPicture: Jane Barlow/PA | Jane Barlow/PA

Days after winning the general election, new Prime Minister Keir Starmer, visiting Edinburgh, said he was "very concerned" at the situation at Grangemouth and revealed work had already begun on a rescue plan.

UK Energy Secretary Ed Miliband announced funding work to explore options for a sustainable future for the site soon afterwards. And the Scottish Government’s Energy Secretary Gillian Martin pledged to work with Petroineos, the UK Government and the Unite union on a long-term, sustainable future for the plant.

But the Scotsman quoted Frank Demay, chief executive officer at Petroineos Refining, saying Grangemouth should be ready to begin operating in its new role as a distribution hub from the second quarter of 2025.

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. 

“The action we are taking to create an import terminal will safeguard fuel supply for Scotland. We currently expect Grangemouth to be ready to operate as a national distribution hub for finished fuels in Q2 next year.

“Unfortunately, a terminal would require only around one-fifth of the current refinery workforce. Therefore we will soon enter an information and consultation process with representatives of our employees to discuss the proposals.

“We have already agreed to move from the UK statutory minimum redundancy terms to an 18-month package and if plans proceed we intend to do everything we can to reduce the impact on our people. We will of course be seeking to minimise compulsory redundancies as far as possible.”