Scotland’s Grangemouth fuel refinery to close in 2025

Grangemouth refinery in Scotland (Photo: Reuters)

The Grangemouth fuel refinery in Scotland is to close in 2025, with the loss of about 500 jobs. Jointly owned by state-owned PetroChina and petrochemical company Ineos (known as PetroIneos), the plant will be turned into a fuel import-export hub.

In November 2023, the company warned that global pressures on the refining market would likely mean the end of refinery operations.

The UK and Scottish governments have pledged to add a further £20 million in joint funding to the £80 million made available through the Falkirk and Grangemouth growth deal, which aims to support workers and the community by creating new energy projects in the region.

It is estimated the deal will deliver more than £628 million in economic benefits across the area and create about 1600 jobs.

The oldest refinery in Great Britain, opened in 1924 by BP, Grangemouth site already receives imports of liquefied natural gas (LNG) from the United States.

But most tellingly, it appears that declining market demand for products delivered by Grangemouth that has brought about its closure.

Franck Demay, chief executive of PetroIneos, said: “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 the market for those fuels will shrink further.”

In addition, the plant has come under increasing pressure from more modern and efficient refineries located in the Middle East, Asia and Africa.

The refinery has capacity to produce about 7.0 million tonnes of fuel (about 14% of the annual capacity in the UK) and 1.4 million tonnes of petrochemicals per year. But is said to be running at a loss, which could reach £200 million over 2024.