UK chemical manufacturing facing ‘extinction’, says Ineos boss Ratcliffe

Chemical manufacturing in the UK is facing “extinction”, Ineos boss Sir Jim Ratcliffe has said, with the billionaire businessman warning that the sector is having the “life squeezed out of it”.

He spoke after the company last week closed the last remaining, synthetic ethanol plant in the UK.

The Ineos chairman said: “We are witnessing the extinction of one of our major industries as chemical manufacture has the life squeezed out of it.”

While Ineos stressed all employees at the ethanol plant are to be be redeployed across the chemicals business at Grangemouth, it added there would still be a net job loss of 80 roles at Grangemouth, with more than 500 jobs impacted indirectly across the wider economy.

The closure comes after Petroineos, which was established as a joint venture between PetroChina and Ineos, last year confirmed plans to shut its Grangemouth oil refinery in the second quarter of 2025, with the loss of 400 jobs.

Ineos had been manufacturing synthetic ethanol – which is  predominantly used by the healthcare and pharmaceutical sectors –  at Grangemouth for more than four decades.

Ethanol is essential for the manufacture of many pharmaceutical drugs, but the Grangemouth plant was one of only two in Europe.

It had the capacity to produce 226 million litres per year – the equivalent to filling 90 Olympic-size swimming pools – but Ineos said the the UK chemicals industry, like other energy intensive industries, was struggling to be competitive in the global market.

According to the firm, 10 large chemical plants in the UK have closed in the last five years along with no new sites constructed “for a generation”.

Ineos said energy prices in the UK had doubled in the last five years, and are now five times higher than they are in the US – saying that puts companies here at a huge disadvantage.

The firm also said that given many countries outside of the UK and the European Union have no carbon reduction trading schemes or taxes in place, cost differentials could be significant.

And while Ineos said it had cut carbon emissions from its Grangemouth site by almost 50% over the last two decades, it said the next steps on its journey to net zero would require significant investment and government support.

The firm is calling on the the UK Government to act by producing an energy policy that provides globally competitive pricing of natural gas, and hydrogen, as we move towards net zero.

It also says introducing an emissions trading scheme that supports industry and decarbonisation equally is a must, claiming the current scheme acts as a tax on UK operators and favours importers who pay nothing.

In addition, Ineos wants to see a trade policy that supports UK manufacturing in its own domestic markets and does not incentivise imports.

Sir Jim said: “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.”

A UK Government spokesperson said: “This is very disappointing news from Ineos.

“Although the company has said affected employees will be redeployed elsewhere across the site, this announcement will still cause concern for workers and their families.

“This is yet another example of the failure of Scotland’s two governments to have had a credible industrial strategy over the past 14 years.

“That 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.”

The spokesperson continued: “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 £100 million 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.

“We recognise the valuable contribution that the business makes to the Scottish economy and its leading role in the plastics sector – particularly the contribution of the highly skilled workforce.

“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.”