Scotland’s sole oil refinery, located in Grangemouth, will cease operations by the summer of 2025, Petroineos confirmed. The closure will result in the loss of 400 jobs, with the refinery being converted into a terminal for importing petrol, diesel, aviation fuel, and kerosene into Scotland. The shift is due to the site’s declining competitiveness against refineries in Asia, Africa, and the Middle East.
Petroineos, a joint venture between INEOS and PetroChina, announced the planned closure last November, but union leaders had hoped to keep the plant open longer to explore green alternatives. However, the financial losses the refinery faces, reported at $500,000 (£383,000) per day, have accelerated the decision.
The Grangemouth refinery, which opened in 1924, plays a crucial role in Scotland’s energy infrastructure, supplying two-thirds of the country’s demand for refined oil products and providing aviation fuel for its main airports. The plant accounts for around 14% of the UK’s overall refining capacity.
Despite the refinery’s historic importance, demand for its key products has begun to decline, partly due to the approaching ban on new petrol and diesel vehicles. Petroineos CEO Frank Demay stated, "The market for those fuels will shrink further," aligning with the company’s decision to convert the facility into an import terminal, which will be operational by Q2 2025.
The Scottish and UK governments have jointly unveiled a plan to secure the site’s future, promising £100 million to support local energy projects and exploring long-term industrial opportunities through a feasibility study. However, these measures are unlikely to prevent the impending job losses, which are expected to begin early next year.
Grangemouth’s closure is part of the broader shift in global energy markets, where older refineries face increasing competition and reduced demand for fossil fuels. Environmentalists have long campaigned for the site’s closure, but the transition away from oil refining is proving difficult for the affected workers.
