The Scottish and UK governments have pledged a £100 million support package for Grangemouth after bosses at Petroineos announced Scotland’s only oil refinery is to close with the loss of 400 jobs.
The company confirmed to staff at the site on Thursday that the refinery will close in the second quarter of 2025 – with it then switching to become an import only terminal for fuels.
That could see the number of staff employed at Grangemouth drop from the current total of 475 to 75 over the next two years.
UK Energy Secretary Ed Miliband said it is “deeply disappointing” that Petroineos has confirmed its previous decision – announced in October 2023 – to close the refinery.
Gillian Martin, acting Net Zero and Energy Secretary for the Scottish Government, said it will be a “challenging time” for the workforce, and she vowed ministers will “support every worker affected by this decision”.
Petroineos had said last year that the ageing site “faces significant challenges due to global market pressures and the energy transition” – with Grangemouth accruing average daily losses of 500,000 US dollars (£380,000) a day over the last week.
In the wake of the company confirming its closure plans, the two governments announced £20 million of joint funding – with this coming on top of £80 million investment as part of the Falkirk and Grangemouth Growth Deal.
The money will go to help support the local community and also invest in local energy projects to create new opportunities for the area.
Ministers at Holyrood and Westminster are also pledged immediate career support for workers, while Project Willow, which was set up and funded by the Scottish and UK governments to look at future prospects for the site, is said to have identified three credible options.
This could mean Grangemouth transitions to focus on either low carbon hydrogen, clean eFuels, or sustainable aviation fuels.
In a statement on Thursday, the company confirmed: “Petroineos has today announced its intention to cease refinery operations at Grangemouth and transition to a finished fuels import terminal and distribution hub during the second quarter of 2025, subject to consultation with employees.”
Mr Miliband said: “It is deeply disappointing that Petroineos have confirmed their previous decision to close Grangemouth oil refinery.
“We will stand with the workforce in these difficult times, that is why we are announcing a package of investment to help the workforce find good, alternative jobs, invest in the community and serve a viable industrial future for the Grangemouth site, with potential for future support from the National Wealth Fund.
“Unlike in the past, the Government is working in lockstep with the Scottish Government across every front.
“Workers and their families should be in no doubt this is a Government that stands with workers, trade unions and businesses to fight for jobs and investment in Scotland.”
Ms Martin said the Scottish Government is “working very closely with the UK Government”, adding they have together “communicated our disappointment to Petroineos today”.
While she said the Scottish Government would have preferred for “refining to continue as long as possible”, Mr Martin added a “significant package of support” has been put in place which “combines immediate help for affected workers and a long-term contribution to ensure that Grangemouth continues to thrive in the future”.
She added: “We are clear that there should be a just transition for the refinery site and we remain committed to bringing forward low-carbon opportunities that will sustain skilled jobs across the wider area for many years to come.”
Scottish Secretary Ian Murray said: “I understand this is a worrying time for the workers at the refinery and the UK Government is working closely with the Scottish Government and Petroineos to ensure they are being supported.
“Both governments have invested in Project Willow to examine how Grangemouth remains an energy hub in Scotland. The enhanced £100 million Falkirk and Grangemouth Growth Deal announced today will help ensure the long-term future of the site – a key part of our journey to clean energy by 2030.
“We remain committed to working together looking at how we can help the area build on its skilled workforce and local expertise to boost economic growth.”
Unite general secretary Sharon Graham said: “This is an act of industrial vandalism, pure and simple.
“This dedicated workforce has been let down by Petroineos and by the politicians in Westminster and Holyrood who have failed to guarantee production until alternative jobs are in place.
“This is now the last chance for this Labour Government to show whether it’s really on the side of workers and communities.
“The road to net zero cannot be paid for with workers’ jobs.
“The Government must put its money where its mouth is to ensure the jobs are safeguarded. This is the only refinery left in Scotland and it must remain.”
