UK chemicals industry headed for extinction

Article by Sam Baker

BILLIONAIRE chairman of Ineos Sir Jim Ratcliffe has said the UK’s chemicals industry faces “extinction”, after the company’s closed its Grangemouth ethanol plant in January.

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 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, who is a chemical engineering graduate, 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.”


This article is adapted from an earlier online version.

Article by Sam Baker

Staff reporter, The Chemical Engineer

Recent Editions

Catch up on the latest news, views and jobs from The Chemical Engineer. Below are the four latest issues. View a wider selection of the archive from within the Magazine section of this site.