INEOS is mothballing all three of its world-scale chemical plants in Hull, putting almost 4,000 highly skilled jobs at risk, as the company says soaring European energy costs have made the sites uncompetitive.
The plants are Europe’s last remaining world-scale Acetyls units, producing essential chemical building blocks used across industries including pharmaceuticals, clothing, cosmetics, detergents, construction materials, food products and high-energy military explosives.
Two of the Hull plants have already stopped production, with the third due to come offline within days. The sites will remain mothballed until further notice.
INEOS says European gas prices have reached 12 times the level in the United States. Gas is used at the Hull facilities both as an energy source and as a feedstock in the production process.
The company also says European gas-based production is now eight times more expensive than coal-based production in China.
The energy-price gap comes with a significant environmental cost, according to INEOS. The company says products manufactured at its Hull facilities have a carbon footprint half that of equivalent US production and one-eighth that of Chinese production.
INEOS says the Hull operations, supported by repeated investment, are among the most efficient chemical plants in the world and operate at the lowest possible level of CO2 emissions.
The closure threat extends beyond the plants themselves, with almost 4,000 highly skilled jobs and associated apprenticeship schemes supported by the three sites. Their products are supplied across Europe.
INEOS says the Hull plants are now the last remaining Acetyls units in Europe, after other facilities closed amid what the company describes as uncompetitive energy costs.
Commenting, Jim Ratcliffe, Chairman of INEOS said; “I’m sure people will find it hard to believe that we are being forced to mothball some of the most efficient plants in Europe but with gas prices now 12 times the level in the US and 8 times that of China, we just cannot compete.
“Not only is the ridiculously high gas price destroying our manufacturing base and the jobs of hard-working people on Humberside, it is also massively increasing the environmental burden with replacement products supplied from the USA at double the carbon emissions and from China at 8 times the emission level.
“The European regulators need to wake up to the fact that the combination of high energy costs and the additional burden of unsustainable carbon taxes are destroying our European manufacturing base. Ironically this will result in higher CO2 emissions from less efficient Chinese and US production. The net result of these current policies is to encourage coal based production in China and the wholesale export of jobs to both China and the USA.”
