(Bloomberg) -- Scotland’s only operating oil refinery is set to close early next year, quashing hopes of both the local government and unions who’d had pushed to extend the life of the site outside Edinburgh.
The closure of the refinery, which was announced last year, will leave the UK with five sites where diesel and gasoline will be produced. Ineos, a partner in the plant, has said it will retain the chemical operations there.
“Demand for key fuels we produce at Grangemouth has already started to decline and, with a ban on new petrol and diesel cars due to come into force within the next decade, we foresee that the market for those fuels will shrink further,” Frank Demay, head of Petroineos refining, said in a statement.
Grangemouth has previously said that its refining business isn’t viable, partly due to increased competition with bigger, more modern and efficient sites in the Middle East, Asia and Africa. The refinery site will be converted into a fuel import terminal, the same fate as met the Coryton plant outside London which stopped processing oil more than 10 years ago.
The halt of refining at Grangemouth in the second quarter of 2025 will result in the loss of 400 jobs. Secretary of State for Energy Security and Net Zero Ed Miliband said the decision is disappointing.
Ineos said it is working with the Scottish and UK governments on options for Grangemouth to become a hub for making cleaner products such as sustainable aviation fuel, low-carbon hydrogen and synthetic fuels. Commercially viable opportunities are to be identified by spring 2025 in an initiative dubbed Project Willow.
--With assistance from Alex Longley and Bill Lehane.
(Updates with plans on renewables in last paragraph.)
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