UK to invest 200 million pounds in oil refinery closure site February 23, 2025

The site's refinery is due to close in the coming months (Jane Barlow/PA) (PA Archive)

By AFP - Agence France Presse

UK to invest 200 million pounds in oil refinery closure site

The UK government announced on Sunday an investment of 200 million pounds (250 million dollars) for the site of Scotland's only oil refinery, which is due to close this year.

First Minister Keir Starmer said the government would invest in “new opportunities” at Grangemouth, in central Scotland, to “secure the long-term future of the plant”.

The owners of the Grangemouth refinery, Petroineos, decided in 2023 to convert the UK's oldest refinery into an import terminal, citing reduced demand for fuel products. The closure will result in the loss of more than 400 jobs.

Starmer announced that £200 million will be invested by the national wealth fund, a publicly-owned green energy fund that hopes to encourage private investment in renewable energy and boost Britain's bid to become net zero by 2050.

We will support this symbol of Scotland's industrial brilliance,” said Starmer at the Scottish Labour Party conference in Glasgow.

Starmer, who won the election last year promising to move towards clean energy, said there was a “huge opportunity for renewal” at the site, which could have a future in biofuels or hydrogen energy, for example.

The government also announced funding for retraining workers and was looking to “identify a viable, low-carbon industrial future” for Grangemouth, according to a statement.

The transition to renewable energy “must be managed pragmatically”, Starmer said, adding that “the oil and gas in our waters is also vital to our security”.

“Oil and gas will be part of Scotland's future for decades to come,” added Starmer, whose Labour government planned to ban new oil and gas exploration in the North Sea.

Unite, one of the two main unions campaigning against the refinery's closure, celebrated the announcement as a “step forward in the right direction”.

The UK and Scottish governments have already pledged £100 million by 2024 to create jobs in the Grangemouth area through “investment in local energy projects”.

Britain's last coal-fired power station was closed last year in a historic move as the country races to phase out fossil fuels. The government is also planning to end the sale of petrol and diesel cars by the end of the decade.

However, there are concerns that oil-generating nations such as Scotland will struggle to switch to renewable energy while protecting workers in fossil fuel industries.

aks/tw