UK Government pledges £120m to save Grangemouth chemical plant

The UK government funding, together with extra money from owner Ineos, brings the total investment to £150m, protecting the workforce at the site along with hundreds of other jobs in the supply chain.

The facility is the UK’s last ethylene plant, and manufactures products used by hundreds of UK plastic companies.

The production of chemicals has been the main industry at the Grangemouth site since the closure of the refinery there earlier this year.

But recent reports suggested the chemicals plant was also at risk of shutting because of high energy costs.

Prime Minister Sir 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.

“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.”

The UK Government said the package will help secure the site’s operations and contribute toward improving energy efficiencies, reducing carbon emissions and increasing productivity.

It comes after ExxonMobil announced it is closing its Mossmorran ethylene plan in Fife, putting hundreds of jobs at risk.

The Grangemouth plant also links to the Forties Pipeline System, which is key for transporting North Sea oil and gas to onshore facilities.

The UK Government said the plant’s closure would have seriously affected hundreds of onsite workers, impacted thousands of jobs regionally, and devastated supply chains.

Chancellor Rachel Reeves said the deal secures hundreds of jobs “way into the future”.

She 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.”

Business Secretary Peter Kyle described the investment package as a move of “strategic national importance”.

He said: “By partnering with INEOS we are backing the plant and its long-term future, giving certainty to workers and the supply chain going forward.

“This approach is part of our Modern Industrial Strategy through which we are working to reduce the cost of energy for industry and support manufacturing in the UK.”

Scottish Secretary Douglas Alexander said the investment was a “landmark moment” for Grangemouth.

He said: “Grangemouth has been at the heart of Scotland's industrial story for generations, and today we're ensuring it remains central to our future.

“This is a landmark moment for Grangemouth. This £120 million UK Government investment protects not just the 500 jobs at the plant, but thousands more across Scottish supply chains.”

INEOS CEO 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. The support of the UK Government is welcome as we work to deliver competitive and efficient low-carbon manufacturing for the UK, long term.

“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 includes safeguards to protect taxpayers’ money, such as strict assurances that the funding can only be used to improve the site, and also gives the UK Government the right to share in future profits.

The chemicals sector across Europe has faced significant challenges in recent years, including high energy costs, with around 40 percent of remaining European ethylene capacity having recently closed or remaining at risk.

This comes on top of the UK Government already committing £200m of investment from the National Wealth Fund to support new projects in Grangemouth. The 140 enquiries which have been received are being considered.

Last week it was announced that around 310 jobs will be supported at the site over the next five years by the Scottish company MiAlgae.

It has started construction on its first commercial scale manufacturing facility that will transform whisky waste into fish-free Omega 3 following £3 million in UK and Scottish government backing.

Some 400 workers were made redundant when the Grangemouth oil refinery shut earlier this year.

Labour MP for Alloa and Grangemouth Brian Leishman had called on the UK Government to nationalise the refinery, but it refused to do so.

Robert Begbie, CEO Commercial & Institutional, NatWest - which facilitated the investment - said: “As the UK’s biggest bank for business, accelerating regional growth is a key priority for us at NatWest. We know that this vital funding will support Ineos Grangemouth in remaining a critical site for our national resilience and prosperity, whilst helping protect jobs in Scotland and beyond.”