INEOS to mothball three Hull chemical plants amid soaring UK energy costs

The international conglomerate says gas prices in the UK are now 12 times those in the US, and eight times more costly than production based on coal from China

Three chemical plants in Hull owned by Ineos are set to be “idled” in a move that puts 4,000 jobs at risk. Ineos’ billionaire owner Sir Jim Ratcliffe cited soaring gas prices as the reason for mothballing the facilities at Saltend Chemicals Park, which manufacture products used across pharmaceuticals, clothing, cosmetics, detergents, construction materials and military explosives.

The international conglomerate states that gas prices in the UK are now 12 times higher than those in the US, and eight times more expensive than production using coal from China. With the plants relying on gas both for energy and throughout the manufacturing process, continuing operations has become financially unviable.

Sir Jim, 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 eight times that of China, we just cannot compete. Not only is the ridiculously high gas price in the UK 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 eight times the emission level.

“The UK Government’s energy policy is leading to economic vandalism on an industrial scale, exporting jobs to China and the United States and driving up global CO2 emissions at a stroke.”

Two of the three chemical intermediate plants have already suspended operations, with a third set to go offline within the coming days. Ineos has described the move as being “until further notice” and warned that permanent closure would put close to 4,000 jobs on Humberside at risk, reports Hull Live.

The decision by Ineos comes after the loss of 60 jobs at Saltend last year, when the company similarly cited soaring energy costs and competition from abroad. The facilities provide materials to clients throughout Europe.

The company maintains that due to significant investment, the Hull operations rank among the most efficient globally and run at the lowest achievable CO2 emissions levels. The Hull units manufacture material with a carbon footprint reportedly two times smaller than that produced in the United States and eight times lower than Chinese-made material.

A Government spokesperson said: “While this is a commercial decision from Ineos, we know this will be a concerning time for workers in Saltend and their families. We’ve taken bold action to support our chemicals industry including £350m for strategically important chemicals producers, which will be available on a co-investment basis.

“We’ve also put trade measures in place on foreign chemicals imports and are tackling high electricity costs via our Supercharger and British Industrial Competitiveness Scheme to keep our chemicals sector competitive.”