Ceasing operations at refinery ‘directly counter to just transition’

The decision to cease operations at Scotland’s only oil refinery runs “directly counter to a just transition to a low carbon economy”, an expert advisory group has said.

Petroineos, which owns the plant at Grangemouth, on Wednesday announced that the site will stop operating in 2025 and will become a fuel import terminal.

The firm said the site “faces significant challenges due to global market pressures and the energy transition”.

Scotland’s Just Transition Commission said it is “deeply concerned” there will be a repeat of “previous unmanaged industrial transitions in coal and steel” which have left a negative legacy in some communities.

It is understood the proposals could result in the loss of around 400 jobs.

Scotland’s Just Transition Commission said: “The announcement earlier this week regarding the future of the refinery at Grangemouth runs directly counter to a just transition to a low carbon economy in Scotland.

“The Just Transition Commission is deeply concerned that we will see a repeat of previous unmanaged industrial transitions in coal and steel whose harmful effects are still felt by communities across the country.

“In this case there appears to have been minimal engagement with workers, the community or government ministers.

“We urgently need to understand what plans, if any, have been made to support a transition for workers impacted by these changes beyond redundancies, as well as what steps will be taken to ensure we are not effectively off-shoring emissions currently associated with the Grangemouth site.

“The announcement underlines clearly the need for government to play an active role in safeguarding workers and communities through the transition, since the market alone will not deliver a just transition.”

Around 500 permanent staff work at the refinery and the owners believe around 100 would be needed to operate an import terminal.

The commission is calling on Petroineos, the UK Government and the Scottish Government to engage fully and in good faith with workers and the community at Grangemouth and the surrounding area.

It also urges them to create a credible just transition plan that ensures employment levels and economic activity within the community are protected.

The Just Transition Commission is an independent expert advisory group which scrutinises the development of just transition plans led by the Scottish Government and advises on the best approach to monitoring and evaluating the just transition.

Before this week’s developments the commission had agreed to visit Grangemouth early in 2024.

It will then publish findings and recommendations on next steps to support a just transition for the site.

Petroineos did not wish to comment.

The UK Government and the Scottish Government have been approached for comment.