Grangemouth refinery closure will create ‘significant economic shock’ – Swinney

The closure of Scotland’s only oil refinery will create a “significant economic shock”, John Swinney said, as the Scottish and UK governments promised a joint £100 million support package for Grangemouth.

Ministers at Holyrood and Westminster acted after bosses at Petroineos confirmed the refinery is to close in the second quarter of 2025, with the loss of 400 jobs.

In October 2023, the company announced its intention to transition the site to an import only terminal for fuels.

Confirmation it will close by June next year comes the company said Grangemouth has been accruing average daily losses of 500,000 US dollars (£380,000) over the last week.

UK Energy Secretary Ed Miliband said the move is “deeply disappointing” – and the Unite union branded it an “act of industrial vandalism, pure and simple”.

Unite general secretary Sharon Graham said the “dedicated workforce” at Grangemouth had 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”.

She demanded: “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.”

Mr Swinney meanwhile gave an “absolute” commitment to work with the UK Government “to support the workers of Grangemouth in their time of need”.

The Scottish First Minister said both governments had made the case to Petroineos for “refining to be continued for as long as it was possible”.

But 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.”

The £100 million support package includes £80 million for a Falkirk and Grangemouth Growth Deal, as well as a further £20 million.

Speaking during First Minister’s Questions on Thursday afternoon, Mr Swinney said the cash will “provide assistance for the locality to recover from this significant economic shock”.

The two governments are also promising support for workers who face losing their jobs, while Project Willow – which was previously set up by the two administrations 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.

“We will put in all effort that we can to support the workforce at this very, very difficult and worrying time,” Mr Swinney said.

Scottish Conservative leader Douglas Ross described the closure of the refinery as a “devastating blow to the workforce” as well as to “the entire Scottish economy”.

Mr Miliband meanwhile pledged: “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.”

Acting Scottish Energy Secretary Gillian Martin confirmed Holyrood ministers are “working very closely with the UK Government”, adding they had together “communicated our disappointment to Petroineos today”.

While she said the Scottish Government would have preferred for “refining to continue as long as possible”, Ms Martin stressed 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 at what is a “worrying time for the workers at the refinery”, the two governments are “committed to working together, looking at how we can help the area build on its skilled workforce and local expertise to boost economic growth”.

Local MSP Michelle Thomson told Holyrood she has been working with a third party who could buy the refinery from Petroineos.

“I can today make the chamber aware that I have been working with a third party who hopes to purchase the refinery in its entirety,” she said.

While adding that the matter is “commercially sensitive and confidential”, she asked Mr Swinney to meet her to discuss it – with the First Minister responding he would be “very happy” to do so to “explore all possibilities”.

Speaking to journalists afterwards, Ms Thomson said the potential buyer is an international interest which is making a “serious offer”.

She said she would not divulge further details on the potential buyer, saying she had signed an NDA.