UK Government Commits Over £120 Million to Safeguard Grangemouth Ethylene Plant

Government Intervention Secures Vital Industrial Asset

The UK government has committed over £120 million in funding to secure the future of the Grangemouth ethylene plant in Scotland, a move designed to safeguard 500 direct jobs and hundreds more across its extensive supply chain. This substantial investment forms part of a larger £150 million joint package with the plant's operator, INEOS, which will contribute an additional £30 million. The announcement was made on Wednesday, December 17, 2025, and underscores the government's commitment to protecting key industrial capabilities within the United Kingdom.

Prime Minister Keir Starmer stated, 'This is about good jobs, stronger communities, and a modern economy that works for everyone.' He added, '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. Promise made, promise delivered.'

Strategic Importance of Grangemouth

The Grangemouth facility is recognized as the UK's last remaining ethylene plant, making its continued operation strategically vital for the nation's critical infrastructure. Ethylene, a fundamental chemical building block, is essential for a wide array of industries, including:

• Medical-grade plastics production
• Water treatment chemicals
• Advanced manufacturing sectors such as automotive, aerospace, and defense

Business Secretary Peter Kyle emphasized the plant's significance, stating, '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.' The plant also plays a crucial role in the Forties Pipeline System, facilitating the transport of North Sea oil and gas onshore.

Investment Details and Future Outlook

The government's financial contribution includes a £75 million loan guarantee and a £50 million grant. This package is intended to support operational improvements at the site, focusing on enhancing energy efficiency, reducing carbon emissions, and increasing overall productivity. These measures are crucial for strengthening the plant's long-term competitiveness, particularly given the challenges faced by Europe's chemical sector due to high energy costs.

Sir Jim Ratcliffe, CEO of INEOS, welcomed the government's support, noting that it 'protects 500 high-value jobs, secures supply chains and preserves the industrial capability the nation needs.' Chancellor Rachel Reeves reiterated the government's stance, saying, 'We said we would stand squarely behind communities like Grangemouth and we meant it.' This intervention is part of the government's broader Modern Industrial Strategy, which identifies chemicals as a foundational sector underpinning high-growth industries.