Scotland’s Only Oil Refinery to Close, 400 Jobs at Risk

Scotland’s last remaining oil refinery, located in Grangemouth, is set to close early next year, resulting in the loss of 400 jobs. The decision, which had been announced last year, comes despite efforts from both local government officials and unions to extend the refinery’s life. The closure will reduce the number of UK oil refineries producing diesel and gasoline to just five.

The closure marks a significant shift in Scotland’s energy landscape. Ineos, a key partner in the refinery, has stated that while the refinery will cease operations, the chemical processing facilities at the site will remain active.

Frank Demay, head of Petroineos Refining, addressed the reasons behind the decision: “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.

The Grangemouth refinery has struggled to remain financially viable, facing growing competition from larger, more modern refineries in the Middle East, Asia, and Africa. The site will be converted into a fuel import terminal, a similar outcome to the Coryton refinery outside London, which ceased oil processing over a decade ago.

The cessation of oil refining at Grangemouth, set for the second quarter of 2025, has sparked disappointment among government officials and the local workforce. Ed Miliband, Secretary of State for Energy Security and Net Zero, expressed his regret over the decision: “The closure of this key facility is disappointing for Scotland and for the UK as a whole.

Ineos is now exploring options for the future of the site, working with both the Scottish and UK governments to transform Grangemouth into a hub for the production of cleaner energy. The company has proposed plans to develop sustainable aviation fuel, low-carbon hydrogen, and synthetic fuels as part of Project Willow, an initiative aimed at identifying commercially viable alternatives by spring 2025.

The closure of the Grangemouth refinery is yet another example of the UK’s ongoing transition away from fossil fuel-based energy, with increasing focus on meeting climate goals and developing greener alternatives for the future.

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