Sir Jim Ratcliffe’s industrial firm, Ineos, has decided to halt production at its three Humberside facilities due to soaring UK gas prices. The company claims these costs are significantly higher than those found in the US and far exceed the costs for their coal-reliant Chinese competitors.
Industrial Action Due to High Costs
Ineos reports UK gas prices are twelve times higher than those in the US and eight times higher than China’s coal-based processes. Sir Jim expressed frustration, claiming that despite their plants being model examples of efficiency within Europe, the current energy expenses make it unviable to continue operations.
Impact on Production and Staff
The halted facilities manufacture essential raw materials used in various sectors across Europe, ranging from pharmaceuticals to military explosives. This shutdown directly affects up to 1,000 employees, with 245 of them stationed at the Humberside site. However, Ineos aims to retain its workers while it seeks more affordable liquefied natural gas (LNG) from the US or waits for regional gas prices to stabilise.
Call for Policy Changes
The company urges the UK and EU governments to impose tariffs on Chinese products to level the competitive field. Meanwhile, Sir Jim has continued his critique of government energy policies, dubbing them “economic vandalism on an industrial scale.” He previously stated to the BBC that he has lost faith in the UK’s future due to ineffective policies, high taxes, and high immigration, despite his support for Brexit and subsequent relocation to Monaco.
Government Response
In response to Ineos’s concerns, a government spokesperson outlined the £350 million provided to support crucial chemical producers via co-investment schemes. They also mentioned ongoing trade measures to manage foreign chemical imports and initiatives to tackle electricity costs to support the industry.
External Influences on Gas Prices
The price of natural gas in the UK and Europe has seen a marked increase since July. This increase has been partly attributed to disruptions in oil and gas supplies through the Strait of Hormuz following geopolitical tensions involving the US and Israel in Iran.
Sustainability Claims
Ineos underscores that their plants boast impressive efficiency and produce materials with a carbon footprint substantially smaller than those of their US and Chinese counterparts. Despite two plants already ceasing operations, plans are in place to shut down a third shortly.
Reporting based on coverage first published by bbc.co.uk.