Government Acts to Save the Last U.K. Ethylene Plant

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)

Summary

The U.K.'s last ethylene plant has been saved from closure by an injection of £120 million (US$160 million) from the government. Owner INEOS Group (London), who has been highly critical of the U.K. and the European Union (EU) over its lack of support for the chemicals industry, will also invest £30 million (US$40 million).

Saving the Last Ethylene Plant

The U.K. government has stepped in to save its last ethylene plant at Grangemouth in Scotland with £120 (US$160 million) million funding. 

The plant, which employs 500 people, will also benefit from £30 million (US$40 million) from owner INEOS Group (London), which has been vocal in recent years about the government's and the EU's lack of support for the struggling chemicals sector. Ethylene produced at Grangemouth is essential for medical-grade plastics production, water treatment and in aerospace and car-building, the government stated. The money will go to improving energy efficiencies, reducing carbon emissions and increasing productivity. INEOS said it has spent more than £100 million (US$133 million) over the last year maintaining operations at the site.

Europe's Chemicals Sector in Trouble

About 40% of Europe's ethylene production capacity has either shut down or was at risk, according to the Department for Business and Trade. The decision comes just months after Exxon Mobil Corporation (Spring, Texas) announced the closure of its Fife Ethylene Plant (FEP) at Mossmorran in Scotland with the loss of up to 400 jobs, after failing to agree on a path forward with the U.K. government. The company, which had threatened to exit Europe over excessive EU policies, cited an unfavorable economic and policy environment under the current U.K. government, alongside high supply costs, poor market conditions and plant efficiency. For additional information, see November 21, 2025, article--ExxonMobil Shutting Scottish Ethylene Operations.

The Government Take

U.K. Business Secretary Peter Kyle said: "The government's decision to step in will protect Grangemouth as a site of strategic national importance and secure 500 vital jobs in the area. 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 U.K."

INEOS Happy but Calls for More Action

INEOS Chief Executive Officer Sir Jim Ratcliffe added: "The support of the U.K. government is welcome. However, we need to continue to work together to deliver competitive and efficient low-carbon manufacturing for the U.K., long term. The answer is not decarbonisation by deindustrialisation. Without a strong manufacturing base, the economy will continue to decline. High energy costs and punitive carbon charges are driving industry out of the U.K. at an alarming rate. If politicians want jobs, investment and energy security, then they must create a competitive environment."

A Tough Year for Grangemouth

This summer, owner/operator Petroineos (London) - a joint venture between Chinese state oil firm PetroChina (Beijing, China) and INEOS shut the 150,000-barrel-per-day (BBL/d) refinery at Grangemouth - Scotland's only refinery and one of only six refineries in the U.K. It cited high costs and declining fuel demand in Europe for its decision, which cost 400 jobs. In January, INEOS shut its last synthetic ethanol production plant in the U.K., also at Grangemouth, blaming high energy prices and high carbon taxes. Earlier this year, Industrial Info reported on a £200 million (US$266 million) investment pledge by the government to help transform the site of the Grangemouth oil refinery into a clean energy hub. For additional information, see November 21, 2025, article--Scotland's Grangemouth Refinery Gets $252 Million Lifeline. Industrial Info is tracking nine INEOS/Petroineos projects at Grangemouth worth almost US$500 million in investment. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for the reports.

Key Takeaways

• The U.K.'s last ethylene plant has been saved from closure by an injection of £120 million (US$160 million) from the government. 
• Ethylene produced at Grangemouth is essential for medical-grade plastics production, water treatment and in aerospace and car-building.
• About 40% of Europe's ethylene production capacity has either shut down or is at risk.

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