Government invests £120m to save UK’s last ethylene plant | Scotland

Jim Ratcliffe’s chemicals company Ineos has been given £120 million of government funding to help save Britain’s last ethylene plant at Grangemouth in a deal expected to protect more than 500 jobs.

The UK government said the investment in the Scottish facility was necessary to protect a vital part of the country’s chemical infrastructure. It was also stated that the ethylene produced here is necessary for the production of plastic for medical purposes, water purification, and aviation and automobile construction.

Keir Starmer said the investment, along with an additional £30 million from Ineos, was proof his government would “invest in the future of Britain”.

“This is about good jobs, stronger communities and a modern economy that works for everyone,” he said in a statement.

“Our commitment is clear: supporting British industry, supporting hard-working families and ensuring places like Grangemouth can thrive for years to come. Promised, promised delivered.”

Ratcliffe, 73, owns a minority stake in Manchester United and is worth $14.7bn (£11bn). Bloomberg’s billionaires index.

He said government support had “protected 500 high-value jobs, secured supply chains and maintained the industrial capacity the country needs”.

The deal, which will be announced by Prime Minister Rachel Reeves and business minister Peter Kyle at the facility near Edinburgh on Wednesday morning, also has significant political implications.

Both the UK and Scottish governments have come under intense criticism for not acting quickly to replace the hundreds of jobs lost when Ineos closed its other major site at Grangemouth, an oil refinery it co-owns with PetroChina, earlier this year.

The political crisis over job losses linked to the move away from oil and gas deepened further when ExxonMobil announced last month it would close its aging ethylene plant in Fife next February with the loss of 429 jobs. In this case, the UK government rejected requests to invest, arguing that the site did not have a competitive future.

With less than six months until May’s Scottish parliament elections, the latest polls show Labor falling far behind the Scottish National Party and neck and neck with Reform UK, with voters abandoning Labor in protest at the UK government’s handling of the economy.

About 40% of Europe’s ethylene production capacity is either closed or at risk, the Department of Trade and Trade said.

Reeves supported the prime minister’s position. “We said we would fully stand behind communities like Grangemouth, and we meant it,” he said.

“Building on the millions of pounds we have already invested in Grangemouth, this vital package protects our national resilience and secures the livelihoods of hundreds of people working in the area well into the future.”

The funding follows two other job postings in Grangemouth announced jointly by the Scottish and UK governments last week, with around £10 million being released to fund new low-carbon green chemical plants expected to create up to 310 new jobs by 2030.

A university startup called MiAlgae expects to start producing omega-3s for pet food and fish farm meal from whiskey byproducts at a new facility there next spring, while a new biorefinery owned by Celtic Renewables will produce the chemicals acetone, butanol and ethanol from whiskey and agricultural waste.

Meanwhile, Ineos is preparing to make hundreds of redundancies across the company’s global workforce as Ratcliffe’s heavily indebted empire comes under increasing pressure from the high cost of gas it uses as a feedstock in its refineries.

It plans to cut 60 jobs at its chemical plant in Hull, which produces petrochemical products such as acetic acid, and also plans to cut hundreds of jobs from carmaker Ineos Automotive.

The company has announced plans to cut a fifth of jobs at its East Yorkshire chemical plant, after closing two chemical plants in Germany earlier this year; This was due to “too high” energy costs and “too cheap” imports from China.

The company accused Europe of committing “industrial suicide” by implementing green policies that Ineos claimed were further increasing the cost of energy.

The group is also seeking to bring anti-dumping cases to block the import of cheap chemical products into the EU in a bid to protect its core petrochemical operations from further financial distress.