Jim Ratcliffe declares UK chemicals industry faces extinction

The UK is experiencing significant challenges in its chemical manufacturing sector, with Sir Jim Ratcliffe, the chairman of Ineos, drawing attention to a crisis that could lead to the industry's extinction. The closure of the synthetic ethanol plant at Grangemouth, which occurred recently, marked a key event highlighting these difficulties. This facility, the last of its kind in the UK, had been operational for over 40 years, primarily serving the healthcare and pharmaceutical sectors. The shutdown of the Grangemouth plant was attributed to escalating energy costs and stringent carbon taxes that have placed immense financial pressure on domestic producers. Ratcliffe emphasized that this closure is not an isolated incident; it reflects a broader trend as Ineos pointed out that ten large chemical facilities have closed in the UK over the last five years, with no new constructions in place for generations. The impact of these closures is widespread, with a net loss of 80 jobs at the Grangemouth site alone, while more than 500 jobs are affected indirectly across the associated economy. Despite the company's commitment to redeploy employees within the business, the loss of such a significant facility raises concerns about the future of the UK's chemical sector. The reliance on imports of synthetic ethanol, a critical component in numerous products ranging from pharmaceuticals to cosmetics, is now more pronounced. This situation leaves the UK vulnerable to external market fluctuations and supply chain dependencies, potentially compromising the stability of domestic industries. Ratcliffe calls for urgent action from the UK government, urging the formulation of an energy policy that ensures competitive pricing for natural gas and hydrogen as the country moves toward its net-zero goals. He also argues for an emissions trading scheme that balances industrial support with decarbonization, claiming the current framework acts as a tax on UK operators favoring importers who face no such obligations. Furthermore, he advocates for trade policies that bolster UK manufacturing without incentivizing imports. The need for a comprehensive industrial strategy is more pressing than ever, as Ratcliffe warns that de-industrializing the UK does not benefit the environment—it merely transfers production and emissions abroad. As a response, the UK government expressed disappointment with the closure, highlighting their efforts to support affected workers and local economy initiatives, including a $100 million plan and Project Willow aimed at exploring sustainable industrial futures in the Grangemouth area. The Scottish Government reiterated its commitment to securing a long-term future for the Grangemouth industrial cluster while recognizing the vital contribution of Ineos' operations and workforce to the Scottish economy. Stakeholders stress the crucial need for collaboration between governments to ensure a structured and sustainable path forward for the chemical manufacturing industry in the UK.