UK Government £150m deal secures Grangemouth ethylene plant

The UK government has partnered with INEOS in a £150 million joint investment to secure the future of Britain’s last ethylene plant at Grangemouth, protecting around 500 jobs at the site and hundreds more across the supply chain.

Under the agreement, the government will provide more than £120 million in support alongside a multimillion-pound commitment from INEOS, which has already spent over £100 million maintaining operations at the plant over the past year. The deal includes operational commitments from INEOS and safeguards to ensure public funding is used solely to improve the site, with provisions allowing the government to share in future profits.

Grangemouth’s ethylene facility is considered strategically important to the UK’s critical national infrastructure. Ethylene produced at the site underpins supply chains for medical-grade plastics, water treatment chemicals and advanced manufacturing sectors including automotive, aerospace and defence. The plant is also linked to the Forties Pipeline System, a key route for transporting North Sea oil and gas onshore.

The intervention forms part of the government’s modern Industrial Strategy, which identifies chemicals as a foundational sector supporting high-growth industries. Ministers say the package will help improve energy efficiency, reduce emissions and increase productivity at the site, strengthening its long-term competitiveness amid sustained pressure on European chemical producers from high energy costs.

Prime Minister Keir Starmer said: “When we said we’d protect jobs and invest in Britain’s future, we meant it and this is proof. Through partnership, determination, and our Modern Industrial Strategy, we’re delivering new opportunities, fresh investment, and security for the next generation of workers in Scotland. This is about good jobs, stronger communities, and a modern economy that works for everyone.”

Business Secretary Peter Kyle said the decision to intervene would “protect Grangemouth as a site of strategic national importance and secure 500 vital jobs in the area”, adding: “By partnering with INEOS we are backing the plant and its long-term future, giving certainty to workers and the supply chain going forward.”

Chancellor Rachel Reeves said: “We said we would stand squarely behind communities like Grangemouth and we meant it. Building on the millions of pounds we’ve already invested in Grangemouth, this vital package protects our national resilience and secures the livelihoods of hundreds of people employed at the site way into the future.”

Scottish Secretary Douglas Alexander described the deal as “a landmark moment for Grangemouth”, saying the £120 million government investment would protect “not just the 500 jobs at the plant, but thousands more across Scottish supply chains”.

INEOS chief executive Sir Jim Ratcliffe said: “This £150m investment in the future of a major UK industrial site demonstrates INEOS and the UK Government’s commitment to British manufacturing. UK Government support for INEOS’ investment shows the strategic importance of making things in Britain. It protects 500 high-value jobs, secures supply chains and preserves the industrial capability the nation needs.”

The agreement sits alongside wider plans for Grangemouth’s future, including £200 million earmarked from the National Wealth Fund to support new projects at the site, with around 140 proposals already under consideration. Recent announcements include backing for Scottish firm MiAlgae, which is developing a facility at Grangemouth to convert whisky waste into omega-3 products, and the creation of a taskforce to support workers affected by the planned closure of the nearby Mossmorran plant in 2026.

The government says measures to reduce industrial energy costs, including expanded support through the British Industrial Supercharger and proposals under the British Industrial Competitiveness Scheme, will further support energy-intensive sites such as Grangemouth.