Humza Yousaf warns of job losses as Grangemouth oil refinery set to shut

Petroineos, which owns the plant, said the Grangemouth refinery would become a fuel import terminal

Humza Yousaf has warned of “quite significant” job losses as a result of the planned closure of Scotland’s sole oil refinery in a decision branded a “hammer blow” for the local and national economy.

The First Minister spoke out after Petroineos, which owns the plant at Grangemouth, said the facility would become a fuel import terminal.

The company said in a statement: “The timescale for any operational change has not yet been determined, but the work will take around 18 months to complete and the refinery is therefore expected to continue operating until spring 2025.”

Grangemouth

Around 2,000 people are directly employed at Grangemouth, with 500 of these at the refinery. Petroineos – a joint venture between Beijing state energy firm PetroChina and Sir Jim Ratcliffe's Ineos – said a number of employees would remain following the move to an import-only terminal. However, it is thought around 400 jobs could be lost.

Oil has been refined at Grangemouth for a century. It is one of only six refineries remaining in the UK, and Petroineos said the facility was responsible for 4 per cent of Scotland's GDP.

Questioned on the extent of potential job losses at the site, Mr Yousaf said: “We’ve seen that they could be quite significant and that’s why the Scottish Government is very prepared to work with the owners of Grangemouth and, of course, with the trade unions in order to try to ensure a sustainable future for Grangemouth. This will be a very worrying time for the workers that are impacted by this.”

Asked if his Government bears some responsibility for the situation, Mr Yousaf added: “First and foremost, remember decisions about oil and gas licensing are made by the UK Government. Of course, we are a government that values the oil and gas industry. I’ve met with the oil and gas industry on a number of occasions as First Minister, but in the face of a climate crisis, we’ve also made clear that we must move towards a just transition. And the important word in there is the word just and that, of course, is about taking the workers with us on the journey towards a sustainable future.”

Neil Gray, the SNP Cabinet secretary for wellbeing economy, fair work and energy, said: “This is a commercial decision and it is our understanding that these works will futureproof the site to allow it to continue as an important fuel supply source for years to come.”

However, Michelle Thomson, the SNP MSP for Falkirk East, said the decision was “extremely concerning, and this announcement will be devastating to the workforce and our community”.

Scottish secretary Alister Jack said he was seeking information from Petroineos on how many jobs can be repurposed. "We need to get down to the detail on this," he said.

Scottish Conservative energy spokesman Douglas Lumsden said: “This is devastating news for the workers at Grangemouth and will be a hammer blow for the local and national economy if it goes ahead.

“The hostile attitude shown towards Scotland’s oil and gas industry from the SNP-Green Government – as well as Keir Starmer and Labour’s betrayal of the sector – will have been a factor behind this decision.

"They all fail to recognise the need for oil and gas – such as the refinery at Grangemouth – to be part of Scotland and the UK’s energy mix for years to come. Instead, the highly-skilled workforce at Grangemouth have been delivered the worst possible news at a difficult time. The SNP-Green Government must act now.”

Labour’s shadow Scottish secretary Ian Murray said closure would be a “hammer blow to both the local community and Scotland’s economy, and a damning symbol of our two governments’ industrial failure”.

He said: “The workers, skills, and infrastructure of the oil and gas industry have a key role to play in our transition to net zero. Both of our governments must get round the table to try and protect these jobs and support these workers.”

Former first minister Alex Salmond accused the Scottish Government of being “asleep at the wheel”. The Alba Party leader said: “There is a cost to the hostility of Labour, SNP and the Greens to any hydrocarbon production in the North Sea and one price is the closure of Scotland’s most significant industrial plant and the loss of thousands of highly paid jobs directly and through the supply chain.”

Scottish Liberal Democrat economy spokesman Willie Rennie said it was “a dark day for the workers at Grangemouth”. He said: “If the ‘just transition’ is to be more than just a slogan, it must deliver a future for the workers and for the Grangemouth site. The Scottish and UK governments must step up now.”

Green MSP Gillian Mackay accused refinery operators of abandoning hundreds of workers. She said: “This is an appalling way to treat workers who only months ago were being promised that they would be part of a just transition for the site. Instead they are being told their jobs are at risk just weeks before Christmas.

“Sir Jim Ratcliffe and his executives must explain themselves to the community that has for 100 years worked and loyally supported this site, and fully expected a better and more sustainable future that would support generations more.

“I grew up less than 200 yards from the plant and I can tell you right now that workers at the plant are bewildered, betrayed and furious at finding out about this from a story on the internet long after shareholders were made aware. They have been given next to no information.”

She added: “Make no mistake, we must move away from fossil fuels. But this is the exact opposite of a just transition.”

Trade union Unite said it would “leave no stone unturned” in its fight to save jobs at Grangemouth. “This proposal clearly raises concerns for the livelihoods of our members but also poses major questions over energy supply and security going forward,” Sharon Graham, the union’s general secretary, said.

Franck Demay, the chief executive of Petroineos Refining, said the Grangemouth announcement did not change anything at the refinery currently, adding: “As the energy transition gathers pace, this is a necessary step in adapting our business to reflect the decline in demand for the type of fuels we produce.

“As a prudent operator, we must plan accordingly, but the precise timeline for implementing any change has yet to be determined. This is the start of a journey to transform our operation from one that manufactures fuel products, into a business that imports finished fuel products for onward distribution to customers."

The firm is also assessing a number of green opportunities for the site, it has said, including a bio-refinery.