The UK and Scottish governments have announced a joint £100 million investment plan following Petroineos’ decision to close the Grangemouth oil refinery in 2025. The move comes after years of financial losses at the site, with Petroineos citing intense competition from larger, more efficient refineries in the Middle East, Asia, and Africa. The closure marks the end of refining operations at Grangemouth, one of Scotland’s key industrial sites, but both governments are working to secure the future of the area.
Petroineos confirmed that the refinery will shut down by the second quarter of 2025, after losing over $775 million since 2011, despite investing more than $1.2 billion to maintain safe operations. The Grangemouth refinery has been a major part of Scotland’s energy landscape for decades, and its closure will affect both the workforce and the surrounding community.
In response, the UK and Scottish governments have developed a three-point plan to support the workforce and ensure a just transition for the region. The plan includes an immediate £100 million funding package, with £20 million in additional joint funding on top of the existing £80 million for the Falkirk and Grangemouth Growth Deal. This investment is aimed at creating new opportunities in local energy projects and supporting the community over the long term.
The joint investment is expected to generate over £628 million in economic benefits and create more than 1,600 jobs across the Falkirk area in the next 30 years.
UK Energy Secretary Ed Miliband described Petroineos’ decision as “deeply disappointing” but assured workers that the government is taking swift action to support them during the transition. “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,” he said. Miliband also confirmed that the UK Government is exploring options for future support through the National Wealth Fund.
Scottish Government Cabinet Secretary for Net Zero and Energy, Gillian Martin, also voiced concern for the refinery’s workforce. “My immediate thoughts are with the workers and their families. This is a very challenging time, but we are fully committed to supporting every worker affected by this decision,” she said. Martin also reaffirmed the Scottish Government’s commitment to a “just transition” for the refinery site, with plans to bring low-carbon opportunities that will sustain skilled jobs for many years.
As part of the investment plan, both governments are focusing on the site’s future industrial prospects. The £1.5 million Project Willow study has identified three potential options for the site’s long-term development: low-carbon hydrogen, clean eFuels, and sustainable aviation fuels. The project aims to establish Grangemouth as a major energy hub in Scotland as part of the journey towards a cleaner energy future by 2030.
UK and Scottish ministers continue to engage with Petroineos, urging the company to keep the refinery open for as long as possible while exploring all available options. However, Petroineos has made clear that there is no viable commercial future for the refinery business.
Petroineos will now focus on converting the refinery into an import terminal, maintaining fuel supplies by importing refined products rather than refining crude oil on site. This shift will form part of the UK’s broader fuel market, which has seen a rise in imported refined products since 2013.
