Sir Jim Ratcliffe predicts demise of British chemical industry

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In an INEOS press release earlier this month, the Monegasque resident criticised the UK government’s lack of energy strategy and expressed pessimism about the future of chemicals in his native Britain. The statement followed the closure of INEOS’ Grangemouth synthetic ethanol factory, the last in the UK, after 40 years in operation.

The Grangemouth plant produced 226 million litres of synthetic ethanol, the annual equivalent of 90 Olympic sized swimming pools, or the ethanol content of over 600 million bottles of hand sanitizer per year. As a result of the closure, the UK will now need to import to continue to produce many pharmaceutical drugs. 

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The petrochemical giant blamed the decision to close the “strategic UK asset” on energy prices and carbon taxes among other factors. 

In sharp contrast to the US, the price of energy has doubled in Britain in the last five years and is now five times higher than across the Atlantic. While the UK was once a major force in chemicals, and a major employer, no new chemical plants have been built for a generation and 10 large facilities have closed over those same five years. It costs UK Companies 10% more to produce the synthetic alcohol, according to INEOS, making it impossible for them to compete.

The company is “calling upon the UK Government to take urgent action… in the interests of UK manufacturing.” Specifically, an energy policy to provide competitive pricing of natural gas and hydrogen, a more balanced Emission Trading Scheme as “the current scheme acts as a tax on UK operators and favours importers who pay nothing,” and a trade policy that supports UK manufacturing rather than incentivising imports.

INEOS reduced its carbon emissions in Grangemouth by 50% in 20 years, but net zero would require significant investment and Government support. INEOS Chairman Ratcliffe commented: “De-industrialising Britain achieves nothing for the environment. It merely shifts production and emissions elsewhere. The UK, and particularly the north, needs high quality manufacturing and the associated manufacturing jobs.”