Grangemouth oil refinery to close after rescue talks fail

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The UK and Scottish governments have unveiled a £100m package to “secure the industrial future of Grangemouth” after Petroineos said it would wind down operations at Scotland’s only oil refinery with a net loss of £400 jobs and a threat to thousands more.

Both governments described the decision to turn the refinery between April and June next year into a fuel import terminal and distribution center as “disappointing”, each pledging £10m of new money to deliver energy transition projects on site and to support skills training.

This comes on top of their joint £80m funding for the previously announced Falkirk and Grangemouth growth deal, which supports plans for a bioeconomy factory, a £9m low-carbon technology center and a employment center to help workers retrain for green jobs.

“It is deeply disappointing that Petroineos has confirmed its previous decision to close the Grangemouth oil refinery,” said Ed Miliband, Britain’s energy secretary. “We will support the workforce in these difficult times.”

The UK Government has committed to exploring options to develop the site into a green energy hub, with potential support from the National Wealth Fund.

It said a £1.5m crowdfunded study had identified three “credible” options for new industries to build a long-term future for Grangemouth, including low-carbon hydrogen, clean synthetic electronic fuels and sustainable aviation fuels. Petroineos said he would continue to work with the government looking at those options.

In response to the refinery closure, Miliband is co-chairing a meeting of the Grangemouth Future Industry Board with Gillian Martin, Scotland’s cabinet secretary for net zero and energy, and Ian Murray, secretary of state for Scotland, to discuss next steps with local industry . , government and trade union representatives.

Unite, a trade union, described the closure as “industrial vandalism”, which sparked widespread anger among its union members and threatened thousands of jobs at supply chain companies.

“This dedicated workforce has been let down by Petroineos and politicians in Westminster and Holyrood who have failed to guarantee production until there are alternative jobs,” said Sharon Graham, general secretary of Unite.

Petroineos, a joint venture between Ineos and PetroChina, said Britain’s oldest refinery faced market pressures and could not compete with more modern sites elsewhere. Shareholders have invested $1.2bn since 2011 and suffered losses of £775m, he added.

As the import terminal requires far fewer workers, the company said it would enter into a consultation process with the refinery’s 475 employees, with an expected net reduction of around 400 roles over the next two years.

Ineos said it was “business as usual” for the distribution of fuel products.