The government of the United Kingdom will invest £120m as a support plan for the Grangemouth industrial complex.
A contribution of £30m by Owners Ineos will be added to the joint investment deal.
According to the government, the deal will save the Grangemouth plant which is the UK’s last ethylene plant.
Standing near the Grangemouth oil refinery, the plant employs about 500 people in the production of plastics.
The firm said it had spent more than £100m maintaining operations at the site over the past year.
In April, it stopped processing crude oil and moved to being an import terminal for finished fuels, with the loss of 400 jobs.
The Ineos chairman Sir Jim Ratcliffe, in January warned the chemical industry was coming to an end in Britain as a result of high energy costs and carbon taxes.
He noted the new investment package demonstrated Ineos and the UK government’s commitment to British manufacturing.
“It protects 500 high-value jobs, secures supply chains, and preserves the industrial capacity the nation needs,” he said.
“The support of the UK government is welcome as we work to deliver competitive and efficient low-carbon manufacturing for the UK, long term.”
Ineos has given assurances that the funding will be used solely to upgrade the site, while also granting the government a stake in any future profits.
Read the related story on New Daily Prime: Grangemouth chemical plant faces closure amid soaring energy costs
Meanwhile, as a result of the rising cost of energy, stakeholders have expressed concern about the future of the UK petrochemical industry.
Last month, ExxonMobil announced plans to close part of the Mossmoran chemical plant in Fife by February, with the loss of up to 400 jobs attributing their decision to the high cost of energy.
The UK government has raised concerns that increasing energy costs is a major problem for the chemicals industry across Europe, warning that around 40% of ethylene gas production capacity has either shut down or is now at risk of closure.
In support of a transition to a low carbon and renewable industry on the site, chancellor Rachel Reeves in her budget last month,announced £14.5m for Grangemouth.
However, the UK government has been criticised for failing to deliver its £200m pledged to Grangemouth from the National Wealth Fund.
Unions representing workers at Grangemouth have accused both governments of doing too little, too late.
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