Ineos Secures the Operation of Grangemouth Ethylene Base
2025-12-25
On December 17, Ineos Group announced that it will jointly invest £150 million with the UK government to secure the operation of its ethylene production base in Grangemouth, Scotland. Of this sum, £125 million will come from government funding support, including £50 million in grants and £75 million in government-guaranteed loans. The fund will be earmarked for equipment upgrading, energy efficiency improvement, emission reduction transformation and competitiveness enhancement, with specific implementation details and timelines yet to be disclosed.
As ExxonMobil plans to shut down its 830,000-tonne-per-annum ethylene plant in Mossmorran, Scotland, in February 2026, the Grangemouth base will become the only remaining steam cracking production base in the UK. Earlier, Saudi Basic Industries Corporation (SABIC), a subsidiary of Saudi Aramco, had shut down its 865,000-tonne-per-annum Olefins 6 cracking unit in Teesside, UK, in June 2025. The European chemical industry is currently facing a predicament where approximately 40% of ethylene production capacity has been shut down.
Operated by Ineos European Olefins & Polymers Division, the base has an annual production capacity of 830,000 tonnes of ethylene and 200,000 tonnes of propylene. After completing technological transformation in 2016, it switched to low-cost US ethane as feedstock, supplying key raw materials to downstream polyolefin plants. Its products are widely used in medical plastics, high-end manufacturing, aerospace and other fields, and the base is connected to the Forties Pipeline System, the core North Sea oil and gas transportation corridor.
The agreement clarifies that the fund shall be used for the designated purpose only, and the government will obtain the right to share future profits. In addition, the UK government has allocated £200 million through the National Wealth Fund and an additional £14 million in low-carbon project funds to support the development of the base, outlining 9 potential directions such as plastic recycling and bio-refining. Affected by the sluggish industry, on December 16, the spot price of ethylene in Northwest Europe fell by €290 per tonne compared with the beginning of 2025, reaching €505.5 per tonne.
As ExxonMobil plans to shut down its 830,000-tonne-per-annum ethylene plant in Mossmorran, Scotland, in February 2026, the Grangemouth base will become the only remaining steam cracking production base in the UK. Earlier, Saudi Basic Industries Corporation (SABIC), a subsidiary of Saudi Aramco, had shut down its 865,000-tonne-per-annum Olefins 6 cracking unit in Teesside, UK, in June 2025. The European chemical industry is currently facing a predicament where approximately 40% of ethylene production capacity has been shut down.
Operated by Ineos European Olefins & Polymers Division, the base has an annual production capacity of 830,000 tonnes of ethylene and 200,000 tonnes of propylene. After completing technological transformation in 2016, it switched to low-cost US ethane as feedstock, supplying key raw materials to downstream polyolefin plants. Its products are widely used in medical plastics, high-end manufacturing, aerospace and other fields, and the base is connected to the Forties Pipeline System, the core North Sea oil and gas transportation corridor.
The agreement clarifies that the fund shall be used for the designated purpose only, and the government will obtain the right to share future profits. In addition, the UK government has allocated £200 million through the National Wealth Fund and an additional £14 million in low-carbon project funds to support the development of the base, outlining 9 potential directions such as plastic recycling and bio-refining. Affected by the sluggish industry, on December 16, the spot price of ethylene in Northwest Europe fell by €290 per tonne compared with the beginning of 2025, reaching €505.5 per tonne.