Europe’s Green Suicide: Chemicals Industry Could Be Wiped Out In A Decade, Ineos Boss Warns
The European chemicals industry will be wiped out in a decade, with the loss of 6m jobs, unless politicians wake up to its chronic lack of competitiveness, the man at the centre of last year’s Grangemouth dispute has declared.
He says a toxic cocktail of high energy costs – inflated by green taxes – feedstock prices in “another league” to those in America and the Middle East and uncompetitive labour are leading to the rapid closure of Europe’s chemical plants.
That is before Europe is hit by a wave of exports from America – the result of a $71bn (£42bn) spend to 2020 by the US chemical industry as it capitalises on a shale gas revolution that has brought energy prices down to a third of Europe’s.
“I recall the extinction of the European textile industry happening before my eyes as a young graduate at Courtaulds in the 1980s. Chemicals could go the same way. It could well be another European dinosaur,” Mr Ratcliffe says in his letter.
He points out that the chemicals industry is “a rather larger species” than textiles, rivalling the automotive sector as Europe’s biggest manufacturer, with revenues of $1 trillion a year and responsible for 1m direct and 5m indirect jobs.
Adding chemicals are “omnipresent”, whether in “our watches, deodorants, iPhones, cars and Nike shoes”, he says: “Strategically and economically, no large economy should abandon its chemical industry.”
Some 32 of Ineos’s 60 chemical plants are in Europe, but their profits have halved in the past three years while the group’s US profits have tripled. The situation is exacerbated by growing competition from the Middle East and Asia.
Mr Ratcliffe points out that Ineos’s major rival, BASF, in a European market spanning around 200 chemical plants, has also “for the first time ever announced a strategic cutback”.
Pointing out that, in the UK “we have seen 22 chemical plant closures since 2009 and no new builds”, Mr Ratcliffe says of the European plight: “I can see green taxes, I can see no shale gas, I can see closure of nuclear, I can see manufacturing being driven away. It’s not looking good for Europe, we are rabbits caught in the headlights, and we have got our trousers down.”