The UK government has agreed to a major financial support package for a critical Scottish industrial site, pledging £50 million to the Ineos petrochemical plant in Grangemouth.
This intervention comes after the billionaire owner, Sir Jim Ratcliffe, requested assistance in October, warning of the plant's precarious future.
Substantial State Support Preceded Bailout
Newly published government disclosures reveal that chemical firms owned by Jim Ratcliffe had already received between £28 million and £70 million in UK state aid in the four years leading up to this latest bailout.
In the last year alone, Ineos was granted support valued between £16 million and £38 million. The majority of this previous aid came through tax breaks linked to voluntary agreements to reduce energy consumption and carbon emissions at its sites in Grangemouth and Hull.
An Ineos spokesperson stated this support was not "special treatment," but was awarded against strict criteria available to any qualifying UK business.
Protecting the UK's Last Ethylene Plant
The government's primary motivation for the £50 million grant, coupled with a £75 million loan guarantee, was to prevent the closure of the UK's sole remaining ethylene production facility. Ethylene is a fundamental building block for plastics manufacturing.
Ineos will invest £30 million of its own capital into the Grangemouth site. The funding is earmarked for projects to improve energy efficiency, cut carbon emissions, and enhance overall performance, according to Colin Pritchard of Ineos's Olefins & Polymers division.
He highlighted that the plant, which uses North Sea gas and imported liquefied petroleum gas, has been under "extreme pressure" from soaring energy costs since Russia's invasion of Ukraine and from UK carbon taxes.
Ratcliffe's Critique and Broader Financial Strains
While Ratcliffe welcomed the support in an official government release, Ineos issued a separate, strongly worded statement criticising government policy. The billionaire took aim at carbon taxes, which he described as "the most idiotic tax in the world," arguing they disadvantage UK industry against foreign rivals.
"The answer is NOT decarbonisation by deindustrialisation," Ratcliffe wrote. "Without a strong manufacturing base, the economy will continue to decline."
The bailout arrives at a challenging time for the Ineos group. Fitch Ratings downgraded the company's credit rating in September 2024, reflecting concerns over its debt repayment capacity. The group has also faced high costs from its Ineos Grenadier vehicle venture and its minority stake in Manchester United.
The Grangemouth complex has already seen significant job losses, with the neighbouring oil refinery shutting in September 2024 at a cost of 400 positions.
Ineos maintains it has invested over £400 million at Grangemouth in the past five years to protect skilled jobs and maintain competitiveness, warning that without domestic production, essential materials would be imported from often higher-carbon sources abroad.
