Britain’s largest chemical plant will remain open after Ineos secured more than £120 million in government support in a deal designed to safeguard around 500 jobs at its Grangemouth petrochemicals site.
The rescue package will keep the Ineos Olefins & Polymers facility operating after the future of the strategically important site was thrown into doubt earlier this year. The government and Ineos will together invest around £150 million into the plant, which ministers have designated as critical national infrastructure.
Sir Keir Starmer said the intervention demonstrated the government’s commitment to protecting industrial jobs and supporting manufacturing.
“When we said we’d protect jobs and invest in Britain’s future, we meant it — and this is proof,” the prime minister said. “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.”
Sir Jim Ratcliffe, the founder and chairman of Ineos, welcomed the funding, describing it as “important support” for UK manufacturing, despite his previous criticism of Labour’s energy and investment policies.
Under the terms of the agreement, Ineos has provided assurances that the public funding will be used solely to improve the Grangemouth site. The deal also gives the government the right to share in any future profits generated by the facility, offering some protection for taxpayers.
Ratcliffe said: “Through this partnership, Ineos and the UK government have demonstrated their commitment to operating the site and maintaining jobs. The agreement includes safeguards to protect taxpayers’ money and ensures the funding is used to strengthen the plant’s long-term future.”
The company said it has already spent more than £100 million maintaining operations at Grangemouth over the past year. However, the rescue comes after Ineos shut its ethanol manufacturing facility and oil refinery at the site earlier this year, citing high operating costs.
Business secretary Peter Kyle said the deal would provide much-needed certainty for workers and the wider supply chain.
“The UK government’s decision to step in will protect Grangemouth as a site of strategic national importance and secure 500 vital jobs in the area,” he said. “By partnering with Ineos, we are backing the plant’s long-term future.”
The announcement comes amid a difficult period for the UK chemicals sector, which has seen a string of closures and cutbacks. Earlier this month, ExxonMobil confirmed plans to shut its Mossmorran ethylene plant in Fife in February after failing to find a buyer, putting more than 400 jobs at risk.
Exxon said the closure reflected the challenges of operating in the UK’s current economic and policy environment, citing high costs, market conditions and plant efficiency. Paul Greenwood, Exxon’s UK chairman, has warned of an “absolute catastrophe” for Britain’s refining sector, pointing to rising carbon costs not faced by overseas competitors.
Refining and chemicals are not currently covered by the UK’s carbon border tax, due to be introduced in 2027, which is intended to protect domestic industry by applying equivalent carbon costs to imported goods.
Against that backdrop, ministers hope the Grangemouth deal will signal a more interventionist approach to protecting strategically important industries — even as wider questions remain over the long-term competitiveness of UK energy-intensive manufacturing.
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Grangemouth chemical plant saved in £120m government-backed rescue