Exxon to close Scottish chemicals plant in 2026 amid market uncertainty

Nov 18 (Reuters) - Exxon Mobil XOM.N announced on Tuesday it would shut its Fife ethylene plant (FEP) in Scotland in February 2026, saying the site is no longer competitive because of high supply costs, weak market conditions and the UK economic and policy environment.

European chemicals producers, the European Union's fourth-biggest exporting sector after machinery, automotive and pharmaceuticals, have come under pressure from soaring energy costs following Russia's invasion of Ukraine and aging infrastructure, deepening their reliance on imports of key feedstocks such as ethylene and propylene.

Exxon said it had assessed various options to continue production and tested the market for a potential buyer for the ethylene plant situated near the town of Cowdenbeath in Fife.

"FEP has been a cornerstone of chemical production in the UK for 40 years, and its closure reflects the challenges of operating in a policy environment that is accelerating the exit of vital industries, domestic manufacturing, and the high-value jobs they provide," the U.S. oil major said in a statement.

The Financial Times first reported the development earlier in the day. The report also said the company would lay off 200 workers as a result of the shutdown.

The closure comes against a backdrop of falling refining capacity in Europe as companies look to close or convert oil refining assets.

Grangemouth, Scotland's only oil refinery, ceased crude oil processing in April, while Britain's insolvent Lindsey refinery would shut down after failing to attract buyers, Energy Minister Michael Shanks had said in July.