Ineos chairman says UK chemicals sector headed for ‘extinction’ following Grangemouth plant closure

BILLIONAIRE chairman of Ineos Sir Jim Ratcliffe has said the UK’s chemicals industry faces “extinction”, following the company’s closure of its ethanol plant in Grangemouth last week.

Ratcliffe blamed the Scottish plant’s closure on what he called the UK’s “lack of energy strategy” as well as high energy prices. He added that the UK’s emissions trading scheme has effectively served as a tax on UK producers, favouring imported products from countries without such a scheme.

The closure, announced in March 2024, resulted in 80 job losses, while more than 500 were affected indirectly. The facility was one of only two synthetic ethanol plants in Europe, producing 226m L of ethanol per year, predominantly used in healthcare and pharmaceuticals.  

Ratcliffe's latest comments come after last September's announcement ​that an oil refinery in Grangemouth co-owned by Ineos would close in the second quarter of 2025 resulting in 400 job losses. The announcement led to the launch of Project Willow, a joint initiative from the UK and Scottish governments to investigate how Grangemouth could be transformed into a low-carbon manufacturing hub.

Ratcliffe said: “Deindustrialising 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.

“We are witnessing the extinction of our major industries as chemical manufacture has the life squeezed out of it.”

The company added that energy prices in the UK have more than doubled in the last five years which has incentivised imports from the US where energy prices are five times lower.  

David Simmonds, a domestic energy consultant and IChemE Fellow, called for “market reform”. He told TCE: “Renewable energy should bring about an era of lower costs, but we need a longer-term strategy and plans for energy balancing to allow savings to be realised.

“Frankly, I believe the Grangemouth facility could be saved if the government planned the transition to net zero utilising more carbon capture technology.”

A UK government spokesperson said: “This is very disappointing news from Ineos. This is yet another failure of Scotland’s two governments to have had a credible industrial strategy over the past 14 years.

“This is why the UK government is developing an industrial strategy that works for Scotland and the whole of the UK, but that comes after over a decade where Scotland’s industries had no joined-up plan for growth.

“Before July last year there was no plan to support the Grangemouth workers. Within a matter of weeks, and working with the Scottish government, we announced £100m (US$121m) to support the local economy and create jobs and launched Project Willow to explore options for a sustainable industrial future for the wider Grangemouth site.”

A Scottish government spokesperson said: “As set out in our draft Grangemouth Just Transition Plan, the Scottish government is committed to securing a long-term and sustainable future for the Grangemouth industrial cluster including for Ineos’ petrochemicals business.

“Through the Project Willow cross-site study and other initiatives, we will continue to explore viable routes to support industrial emitters at Grangemouth as they decarbonise and transition to low carbon and renewable projects.”

Ratcliffe is the 129th richest person in the world, according to Forbes, with a net worth of US$15.6bn, and was one of the UK’s most prominent industrial supporters of Brexit. The UK’s withdrawal from the EU has cost the country’s chemicals sector at least £2bn, according to a 2022 Defra impact assessment.