Ineos Chemicals Plant Saved Amid Ongoing Challenges for UK Heavy Industry
Ineos's Grangemouth ethylene plant in the UK has been saved with a £120 million infusion of public money aimed at securing production that supports other chemical plants across the country. This decision guarantees ethylene production for another five years, underpinning its critical use in sectors such as medical-grade plastics, advanced manufacturing, automotive, and aerospace.
However, other facilities at Grangemouth present a mixed picture. The associated oil refinery has been closed and converted to an import terminal, while ExxonMobil's Mossmorran ethylene plant is scheduled for closure in February following discussions with government ministers. Earlier in the year, the government briefly considered taking control of British Steel at Scunthorpe, but no long-term plan for the site has yet been announced.
Despite these actions, significant questions remain regarding a cohesive industrial strategy. Promised energy-bill relief for approximately 7,000 energy-intensive businesses has been delayed until April 2027, with unclear details about the extent of the relief available. Ongoing tensions in North Sea policy persist, with no new exploration licenses being issued, although tieback licenses have been allowed to extend existing sites. Additionally, the windfall tax is set to remain in place until 2030 despite the Office for Budget Responsibility projecting weak revenue from it.
Looking ahead, the carbon border adjustment mechanism is planned to commence in 2027 but currently excludes chemicals from its scope. Consultations on including refineries are underway, reflecting ongoing debates about energy security and the future of the UK's industrial base.
Overall, these policy actions appear reactive and sporadic rather than indicative of a clear, integrated strategy to counter the challenges of deindustrialisation. This is despite the Labour party's stated commitment to supporting industrial hubs like Grangemouth.
