Grangemouth owners urged to reconsider ‘premature’ refinery closure
Petroineos announced on Thursday that the site will cease operations in the second quarter of next year.
Scotland’s First Minister has urged the owners of the Grangemouth refinery to reconsider its “premature” closure.
Petroineos announced on Thursday it would shutter the refinery in the second quarter of next year as it looks to move to become an import terminal – putting 400 jobs on the site at risk.
The firm – a joint venture between Ineos and PetroChina – said the site “faces significant challenges due to global market pressures and the energy transition”.
A spokesman for Petroineos said that in the last week, the refinery has lost around 500,000 US dollars (£381,000) per day, and absorbed total losses of 775 million US dollars (£590 million).
Following a meeting with unions and workforce representatives on Friday in nearby Falkirk, the First Minister urged the firm to reconsider.
“I talk to the company, my ministers talk to the company, I’ve talked to the workforce,” he told the PA news agency.
“We’ve made the point that we thought this was premature, the UK Government has talked to them, but we were told yesterday morning this is what was going to be happening.
“I think the decision is premature and I would encourage Petroineos to consider what options there are to prolong the life of the refinery.”
A spokesman for Petroineos said: “We have always communicated openly and directly with Scottish and UK governments, including sharing financial and operational details.
“Our intentions regarding the refinery and a timing envelope were communicated publicly as far back as November 2023.
“It is hard to conceive that any owner would be able or willing to sustain losses on this scale indefinitely and in the face of competitive pressure from newer, more modern facilities across Europe and elsewhere in the world.”
Derek Thomson, Scottish secretary at Unite the union, told PA that Project Willow – the work being done by the Scottish and UK governments on a potential future for the site – is “too slow”, adding: “Project Willow is about the work of tomorrow – we need work today.”
Workers at the site, he said, are “angry”, but he added: “They’re in shock and there’s a real disappointment around the way the government, both governments, have handled this.
“Obviously they both come out pre- and post-general election to say they would be doing all they can to save Grangemouth – the first test of the just transition failed miserably yesterday.”
STUC general secretary Roz Foyer, who also attended the meeting, urged both governments to step in.
“I don’t expect anything less from Petroineos,” she said.
“They’re a private, profit-making company, of course they will put commercial interests first.
“But the Scottish Government and UK Government have set out telling us they think the closure of this site is premature, that there are other options available in the future that we can transition to, but they have failed to make sure that transition happens.
“As far as I’m concerned, this is a failure on both our UK and Scottish governments, because they haven’t got their ducks lined up.
“They’ve known this was coming and they need to ensure they have the political will to intervene when private companies like Petroineos and say: ‘You’ve got your commercial interests, but we have the interests of our country, of our energy community, of the future security, of our communities, and of our economy long term, to put first.'”
Responding to the criticism, the First Minister said: “We’ve been faced with, in my view, a premature decision by Petroineos, so we’ve got to work in that context and to work to support the employees here to create those new opportunities and to find a way through what is a really difficult decision.”
Pressed on what has been done to ensure what both governments have called a just transition for workers at the site, Mr Swinney said: “Work was commenced when the possibility of this – and it is a possibility, not a definite – of this being raised as a potential closure in the second quarter of 2025.
“Work was put in place to develop new technologies and new opportunities. Now obviously, the more time we’ve got available to do that, the more advanced those propositions can be.
“But the assurance I gave the workforce today is that the Scottish Government will work with its partners to make sure that all energy is put into those measures to ensure that we create new opportunities for people in this community.”
