New Government initiative could mean new direction for UK Chemicals – but industry wants more than a funding boost
The Government’s decision to launch the £350 million Critical Chemicals Resilience Fund (CCRF) has been welcomed right across the UK chemicals sector as recognition of the industry’s strategic importance. However, as manufacturers we say yes, it’s not just about the money, but it is about much more financial support (eg energy costs some of which can come through policy change) as well as wider policy reviews.
The success of the initiative will ultimately depend on whether it forms part of a broader support mechanism capable of restoring the UK’s long-term competitiveness as we transition to a net zero industry.
For years, we have argued that the industry has been overlooked despite underpinning almost every major manufacturing supply chain in Britain. From pharmaceuticals and food production to water treatment, aerospace, automotive and defence, critical chemicals are essential to keeping UK industry operating.
The CCRF marks a significant shift in government thinking. Rather than viewing chemicals solely as a major industrial emitter or export sector, ministers are increasingly framing domestic production as a matter of economic resilience and national security. Recent supply chain disruptions, energy price shocks and geopolitical instability have exposed the risks of relying heavily on imported materials and overseas production.
We have broadly welcomed that change in approach.
The announcement is an important acknowledgement that chemicals form part of the UK’s critical infrastructure. While welcoming the funding, improving industrial competitiveness would require sustained action beyond a single investment programme, particularly on energy costs and long-term policy certainty.
Those concerns remain central to the industry’s outlook.
We continue to face some of the highest industrial electricity prices among developed economies, while competitors in the United States and parts of Asia benefit from lower energy costs and substantial government incentives. Investment decisions are increasingly influenced by these structural differences, with companies carefully weighing where to locate future production capacity.
Against that backdrop, many chemical companies see the CCRF as an encouraging first step rather than a complete solution.
The fund is expected to support strategically important production facilities, strengthen domestic supply chains and help safeguard capabilities considered essential to the wider economy. For manufacturers dependent on reliable supplies of specialist chemicals, greater resilience could reduce the risk of future disruption while supporting domestic value creation.
The announcement also reflects a wider international trend. Governments across Europe, North America and Asia are adopting more interventionist industrial policies, recognising that strategic manufacturing sectors require greater support in an increasingly uncertain global trading environment. Chemicals now sit alongside semiconductors, batteries and critical minerals as industries viewed through the lens of economic security.
That shift presents opportunities for the UK, but only if policy remains consistent.
Manufacturers continue to call for a competitive industrial energy strategy, faster planning and permitting processes, support for decarbonisation technologies and greater investment in innovation and workforce skills. Without those complementary measures, there is concern that individual funding programmes may struggle to reverse longer-term investment trends. And we want to see more companies invest in the UK.
The implementation of the CCRF will therefore be closely watched. Decisions over eligibility, project selection and investment priorities will determine whether the fund strengthens genuinely critical production capacity or simply provides short-term financial support.
Nevertheless, the symbolism of the announcement should not be underestimated. Chemical sites right across the country are keen to engage with their local MP and any member of the House of Lords, to show how they operate and discuss issues.
For an industry that has spent several years making the case that chemical manufacturing is fundamental to the UK’s industrial base, the creation of the Critical Chemicals Resilience Fund represents an important policy milestone. It signals that government increasingly recognises resilience, domestic capability and supply chain security as strategic assets rather than simply commercial considerations.
Whether that recognition translates into sustained industrial growth will depend on what comes next. Manufacturers have welcomed the government’s commitment, but their message is clear: resilience requires more than one funding programme. It demands a long-term partnership between industry and government to ensure that the UK remains a competitive location for chemical manufacturing in an increasingly challenging global market.
This is an opportunity for us to say, even sing, “Chemistry’s coming home”, but it’s not here yet.
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