Company News Online Sources 05 Jan 2026 views ( )

£150 Million Investment Secures UK’s Last Steam Cracker at Grangemouth

INEOS has announced a £150 million (approximately ¥1.4 billion RMB) investment in its Grangemouth chemical complex in Scotland—the UK’s only remaining steam cracker—ensuring the site’s continued operation amid the broader decline of British manufacturing. The funding package includes a £75 million government-backed loan guarantee and a £50 million direct government grant, reflecting a strategic partnership between industry and the state to preserve a critical national asset.

Operated by INEOS Olefins & Polymers Europe, the Grangemouth site features an 830,000-tonne-per-year ethylene cracker and a 200,000-tonne-per-year propylene unit, supplying essential feedstocks for polyethylene and polypropylene production. Since its 2016 conversion from naphtha to cost-competitive imported U.S. ethane, the facility has remained a cornerstone of the UK’s industrial base.

The new investment will modernize key equipment, enhance energy efficiency, reduce emissions, and secure over 500 high-skilled jobs. The plant supplies raw materials vital to everyday life—from food packaging and building insulation to automotive parts, medical devices, pharmaceuticals, and sustainable technologies.

Despite these efforts, INEOS faces steep operational challenges. In 2024 alone, the Grangemouth site incurred an additional €100 million in energy costs and €30 million in carbon taxes compared to U.S. counterparts. The company revealed it has spent over £100 million just to maintain operations last year and has long relied on profits from its global businesses to subsidize the Scottish facility—a necessity for survival, according to company statements.

This lifeline comes as the UK’s domestic chemical capacity rapidly vanishes. ExxonMobil is set to shut its 830,000-tonne Fife ethylene cracker in February 2026, citing the UK’s “economic and policy environment” and inability to find a buyer due to high operating costs and inefficiencies. Earlier in 2025, Saudi Aramco’s SABIC permanently closed its 865,000-tonne Olefins 6 cracker in Teesside. INEOS itself shuttered Grangemouth’s adjacent crude oil refinery (a joint venture with PetroChina) and Britain’s last synthetic ethanol plant (180,000 tonnes/year) earlier this year, blaming chronic losses driven by high energy prices and carbon levies.

Across Europe, around 40% of remaining ethylene capacity has either been idled or remains at risk of closure due to soaring energy costs and global competition. In response, INEOS is pursuing a broader strategy to upgrade its global portfolio into modern, efficient, low-emission facilities—reaffirming its commitment to maintaining world-class assets in the UK.

UK Prime Minister Keir Starmer hailed the agreement as proof of his government’s industrial resolve: “We pledged to protect jobs and invest in Britain’s future—and we are delivering. Through collaboration, determination, and our modern industrial strategy, we’re creating new opportunities for Scotland’s next generation. This is about good jobs, stronger communities, and an economy that works for everyone. Our message is clear: we stand with British industry, with hardworking families, and with places like Grangemouth. We say what we mean—and we mean what we say.”