# The Permanently Closure of Scotland’s Oldest Refinery: Challenges and Future Opportunities
In a significant move, Petroineos Refining Ltd. (PRL) has announced the permanent closure of Scotland’s only oil refinery, the Grangemouth plant, by the end of the second quarter in 2025. This decision reflects the unfavourable global market conditions and the global energy transition, which have rendered the 1924-built refinery economically uncompetitive. The facility, which processes 150,000 barrels per day, is located on the Firth of Forth and has been facing financial strain for over a decade.
## Structural Challenges and Market Pressures
The Grangemouth refinery has been grappling with mounting costs to maintain its operational license. Annual expenses associated with core maintenance and repairs have consistently exceeded earnings. This financial strain was further exacerbated by the global pandemic, leading Petroineos to rationalize processing capacity in 2020. The probable ban on new gasoline and diesel cars in the coming years will significantly reduce demand for conventional products, exacerbating the problem.
## Transition Plan and Future Directions
PRL and its parent company, INEOS, have outlined a transformation plan for the site. By 2025, the refinery will cease all conventional crude processing operations and transition into a finished fuels import terminal and distribution hub. This move aims to ensure fuel supply continuity for Scotland. Frank Demay, PRL’s CEO, emphasized, “The action we are taking to create an import terminal will safeguard fuel supply for Scotland.”
Prior to this transformation, Petroineos will engage in a comprehensive consultation with employees and their representatives to address the impacts of the closure. Approximately 400 of the site’s 475 employees will lose their jobs due to the refinery’s shuttering.
## Low-Carbon Fuels Hub: A Potential Path Forward
In tandem with the closure announcement, there are ambitious plans to repurpose the Grangemouth site into a low-carbon fuels manufacturing hub. Petroine