Scotland’s final remaining oil refinery at Grangemouth will shut between April and June subsequent 12 months, ensuing within the lack of 400 jobs and leaving the UK with solely a handful of refineries.
The closure, introduced by Petroineos—a three way partnership between Sir Jim Ratcliffe’s Ineos and PetroChina—comes as home demand for motor fuels declines, exacerbated by the forthcoming ban on new petrol and diesel automobiles.
Frank Demay, Chief Government at Petroineos Refining, said that the demand for key fuels produced at Grangemouth has already began to say no. “With a ban on new petrol and diesel automobiles attributable to come into drive throughout the subsequent decade, we foresee that the marketplace for these fuels will shrink,” Demay mentioned. The corporate cited the prices of sustaining a refinery constructed almost a century in the past as a big issue within the resolution.
The announcement has sparked criticism from political leaders and unions. UK Power Secretary Ed Miliband expressed deep disappointment, whereas his Scottish counterpart, Gillian Martin, and union leaders condemned the choice as “industrial vandalism.” Grangemouth at present accounts for about 14% of the UK’s general refining capability, supplying motor fuels and different merchandise throughout Scotland and northern England. Though the UK stays a web exporter of petrol, it depends on imports for diesel and jet gas.
To mitigate the impression of the closure, Petroineos plans to ascertain an import and export gas terminal on the web site, making certain continued provide to forecourts and different prospects. The refinery has confronted ongoing monetary challenges, with amassed losses of $775 million since 2011 regardless of a $1.2 billion funding. Its ageing infrastructure, initially opened in 1924, is much less environment friendly than that of abroad opponents and requires a further £40 million to stay operational past subsequent spring.
Roughly 75 staff will keep on to function the brand new terminal, whereas as much as 280 jobs might be misplaced within the three months following the closure. One other 100 staff will stay for as much as a 12 months to start decommissioning, with a small quantity staying on for longer to supervise additional decommissioning and demolition efforts.
The UK and Scottish governments have commissioned research to discover potential future makes use of for the refinery, with choices together with hydrogen, biofuels, and sustainable aviation gas. Nevertheless, these alternate options are unlikely to be applied earlier than the refinery shuts down. In response, the governments have introduced a joint funding plan, including £20 million to the beforehand introduced £80 million Falkirk and Grangemouth Development Deal, aimed toward funding new progress tasks within the space. The UK authorities additionally plans to discover utilizing its Nationwide Wealth Fund to assist various makes use of for the refinery web site.
The closure is predicted to have vital ripple results on the broader financial system, impacting quite a few small companies reliant on the refinery. Hisashi Kuboyama from the Federation of Small Companies in Scotland highlighted the broader penalties, warning that “the knock-on impact on the availability chain will have an effect on quite a few small companies throughout the size and breadth of the nation, placing many extra jobs than the 400 on web site in danger.”
Sharon Graham, Basic Secretary of the Unite union, criticised each Petroineos and politicians for failing to safeguard the workforce till various employment alternatives are secured. “This devoted workforce has been let down by Petroineos and by the politicians in Westminster and Holyrood who’ve failed to ensure manufacturing till various jobs are in place,” Graham mentioned. She referred to as on the Labour authorities to show its dedication to staff and communities, including, “The highway to web zero can’t be paid for with staff’ jobs.”
The choice to shut the refinery doesn’t immediately impression different petrochemical operations on the Grangemouth advanced, which can proceed to function. Nevertheless, the closure represents a big shift within the UK’s power panorama, additional rising the nation’s reliance on imported fuels and elevating questions on the way forward for the location and the neighborhood that will depend on it.
