The UK government has committed a major £120 million investment to secure the future of the nation's last remaining ethylene plant, located at the Ineos complex in Grangemouth, Scotland. The deal is set to protect over 500 high-value jobs and preserve a critical piece of the country's industrial infrastructure.
A Vital Lifeline for National Industry
Announced by Chancellor Rachel Reeves and Business Secretary Peter Kyle at the site near Edinburgh, the funding package was described as essential for maintaining the UK's domestic capabilities. The ethylene produced at Grangemouth is a fundamental feedstock for a wide range of sectors, including the manufacture of medical-grade plastics, water treatment systems, and components for the aerospace and automotive industries.
Prime Minister Keir Starmer stated the investment, which includes an additional £30 million from Ineos, demonstrated his government's commitment to "invest in Britain's future." He emphasised that the move was about securing good jobs, strengthening communities, and building a modern economy. "Our commitment is clear: to back British industry, to stand by hardworking families, and to ensure places like Grangemouth can thrive for years to come," Starmer said.
Political and Economic Context
The announcement carries significant political weight, coming against a backdrop of industrial job losses in Scotland. Both the UK and Scottish governments have faced intense criticism for their response to the closure earlier this year of Ineos's oil refinery at Grangemouth, which was co-owned with PetroChina. The political challenge of managing the transition from fossil fuels was further highlighted last month when ExxonMobil confirmed the closure of its ageing ethylene plant in Fife, with 429 jobs lost, after government support was refused.
With Scottish Parliament elections less than six months away, the Grangemouth investment is a clear attempt to shore up support. Recent polls show Labour trailing the Scottish National Party and level with Reform UK, as voters express discontent over economic management.
Billionaire Ineos owner Sir Jim Ratcliffe, who holds a minority stake in Manchester United, welcomed the state support. He said it "protects 500 high-value jobs, secures supply chains and preserves the industrial capability the nation needs." The Department for Business and Trade noted that roughly 40% of Europe's ethylene production capacity has already shut down or is under threat.
Broader Challenges and Green Transition
Despite this rescue package, Ineos is preparing to cut hundreds of jobs globally due to financial pressures from high gas costs, which it uses as a raw material. The company plans 60 redundancies at its acetic acid plant in Hull and further cuts at its automotive division. It has previously blamed "sky-high" European energy costs and cheap imports from China, accusing the EU of "industrial suicide" through its green policies.
In a contrasting move towards a greener economy, nearly £10 million was announced last week for new low-carbon chemical factories at Grangemouth, expected to create up to 310 jobs by 2030. These include a MiAlgae facility making omega-3 from whisky byproducts and a Celtic Renewables bio-refinery producing chemicals from waste.
Chancellor Rachel Reeves reinforced the government's stance, stating, "We said we would stand squarely behind communities like Grangemouth and we meant it." She added that the investment protected national resilience and secured livelihoods for the long term.
