INEOS closes last remaining synthetic ethanol plant in the UK with the loss of several hundred jobs
Sir Jim Ratcliffe, Founder and Chairman, INEOS. Image Credit: INEOS
The UK, which used to be a major force in chemicals, employing a large and highly skilled workforce, has seen the closure of ten large chemical complexes in the last five years alone and, in complete contrast to the USA, has not had one new chemical plant built for a generation.
The synthetic alcohol, which is essential for the manufacture of many pharmaceutical drugs, is necessary for many of the new blockbuster drugs. It will now be imported. High energy prices and high carbon taxes have forced the closure of this strategic UK asset.
The Scottish ethanol plant in Grangemouth is one of only two in Europe and since the start of production over 40 years ago, has produced the equivalent of 25 billion bottles of Scottish whisky. Synthetic ethanol was produced on the Grangemouth plant predominantly for use in healthcare and pharmaceutical sectors. The plant capacity of 180,000 tonne per year is equivalent to 226 million litres per year. Over the course of its operational lifespan, the plant made the equivalent of 25 billion bottles of Scottish Whisky.
Energy prices have doubled in the UK in the last five years and now stand five times higher than those in the USA. The UK cannot compete with such a huge disadvantage. The UK chemicals sector, like many other energy intensive industries, is fighting to be competitive in global markets. Energy costs can be between 5 and 10 times cheaper in some regions. Many countries outside of the UK / EU have no carbon reduction trading scheme or taxes. Combined, this can result in a differential in the costs of distilling and purifying ethanol equivalent to around 10% of the sales price of ethanol.
Over the last two decades, carbon emissions from our operations at Grangemouth have fallen by almost 50%; we are on a journey towards net zero, but the next steps require significant investment and Governmental support/ action.
INEOS is calling upon the UK Government to take urgent action and act in the interests of UK manufacturing. Specifically in three key areas:
1. An energy policy that provides globally competitive pricing of natural gas, and hydrogen, as we move towards net zero.
2. An Emissions Trading Scheme that supports industry and decarbonisation equally; the current scheme acts as a tax on UK operators and favours importers who pay nothing.
3. A trade policy that supports UK manufacturing in its own domestic markets and does not incentivise imports.
Sir Jim Ratcliffe, Chairman of INEOS says, “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. We are witnessing the extinction of one of our major industries as chemical manufacture has the life squeezed out of it.”
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