MSPs briefed

Grangemouth owner planning new role for refinery

The Grangemouth facility is seeking a new role (pic: Terry Murden)

Grangemouth refinery is being prepared for a new role ahead of demand for its fuel falling sharply, a committee of MSPs has been told.

The facility is expected to become a fuel supplier in Scotland instead of a manufacturer, said Iain Hardie, the head of legal and external affairs at Petroineos Manufacturing Scotland.

Mr Hardie, who was unable to provide a precise timetable for ending refining activities, said demand for petrol and diesel will collapse because of the switch to electric vehicles and warned that £40 million of investment was needed just to keep the site open.

Petroineos, a joint venture between Ineos and PetroChina, said last month it was thinking about ending refining operations and was starting work to change the site into a fuel import terminal.

Other options being considered include hydrogen production and the creation of a biofuels refinery.

“In order to get beyond May 2025 it will have to spend a very significant amount of money, in the tune of £40 million, to have a licence to operate beyond then,” Mr told the economy and fair work committee at Holyrood.

“There comes a point where it simply becomes uneconomic for us to manufacture it [petrol and diesel]. Over time that domestic demand will fall away due to EV penetration and hybrids.

“Let’s not forget that post-2030 we expect demand for our product to quite sharply fall off a cliff due to the ban on new build petrol and diesel combustion engines.

“What we are doing now is putting in place the enabling infrastructure so we can continue to play the role of fuel supplier in Scotland but not as a manufacturer.”

He confirmed that the refinery workforce was at 500 but just 100 would be needed for an import terminal.

Neil Gray, the wellbeing economy minister, “We have been in discussion with the [owners] for some time for making sure there is a future for the Grangemouth site and looking at all possible options for a just transition.”

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