The UK government has announced a £50 million bailout for the Ineos chemical plant in Grangemouth, Scotland, marking the latest in a series of substantial state aid packages granted to companies owned by billionaire Jim Ratcliffe.
Millions in State Support Preceded Latest Bailout
According to government disclosures published this week, Ineos received between £16 million and £38 million in state aid in the last year alone. Over the past four years, the total support has ranged from £28 million to £70 million. This financial backing preceded the new £50 million grant confirmed on Tuesday, which is intended to secure the future of the UK's last ethylene production facility.
The government fears that without this intervention, the country would lose its capacity to manufacture ethylene, a crucial raw material for plastics. Alongside the grant, ministers have backed a £75 million loan guarantee. Ineos has committed to investing £30 million of its own capital into the Grangemouth site.
Financial Pressure and Political Backdrop
The bailout comes at a challenging time for the sprawling Ineos group, which has faced significant financial strain. This is partly due to the surge in energy costs following Russia's full-scale invasion of Ukraine in 2022. The situation was exacerbated by the closure of the adjacent oil refinery in September 2024, which resulted in the loss of 400 jobs.
Ratcliffe, whose net worth is estimated at $14.5 billion, formally requested government assistance in October. His business empire has been under scrutiny from credit agencies; Fitch Ratings downgraded Ineos's credit rating in September, signalling concerns over its debt repayment capacity. Ratcliffe has also made major investments in his Ineos Grenadier car venture and holds a minority stake in Manchester United.
Debate Over Carbon Taxes and Deindustrialisation
Most of the previous state aid was delivered through tax breaks linked to voluntary agreements to reduce energy use and carbon emissions. An Ineos spokesperson stated this support was not "special treatment" but was awarded against strict criteria available to any qualifying UK business.
However, Ratcliffe has launched a strong critique of current government policy. In a company statement separate from a supportive government press release, he argued that high energy costs and "punitive carbon charges" are driving industry out of the UK. "The answer is NOT decarbonisation by deindustrialisation," he wrote. He later described carbon taxes as "the most idiotic tax in the world," claiming they disadvantage UK plants against foreign rivals.
Colin Pritchard, head of sustainability for Ineos's Olefins & Polymers division, said the new funding would be used to improve energy efficiency, cut carbon emissions, and enhance performance at the "extremely pressured" Grangemouth site. The plant uses North Sea gas and imported liquefied petroleum gas to produce petrochemicals.
The spokesperson highlighted that Ineos has invested over £400 million at Grangemouth in the last five years to maintain its efficiency and protect skilled jobs. They warned that without domestic production, essential materials would be imported, often from higher-carbon sources abroad.
