Green Energy Threatens UK Manufacturing
Ineos, the chemicals group, is considering shutting down its plant in Grangemouth, Scotland, due to rising costs and the decline in production of gas from the North Sea. Its chairman singles out energy costs, which he says has been driven up by high environmental taxes on consumers.
In a rare interview, chairman Jim Ratcliffe told the Financial Times that Grangemouth was “at a crossroads”.
“To have a future, it needs cheap feedstocks . . . and a sensible cost structure,” he said. “If we can’t resolve those issues, it would need to shut down.”
Mr Ratcliffe, through a string of high-profile deals, has transformed privately held Ineos over the course of a decade into one of the world’s largest chemicals companies, with 51 sites in 11 countries. It has a large petrochemical plant in Grangemouth.
But Mr Ratcliffe said it had “not been a successful asset” for Ineos and had “lost us a significant amount of money” in recent years. He said part of the problem was that the plant used gas from the North Sea, which is in decline, and also had an “expensive” cost base – partly the result of what he called old-fashioned pensions. …
To have a future, it needs cheap feedstocks . . . and a sensible cost structure. If we can’t resolve those issues, it would need to shut down
He said it had “always been hard work for us to manufacture in the UK . . . [which was] not a particularly profitable place for us”. Mr Ratcliffe blamed high energy costs, unions that resisted change and a workforce that was less skilled than in countries such as Germany.
But the chairman singled out energy costs, which he said had been driven up by high environmental taxes on consumers. “It’s fine being very, very green, but it’s not if you’re interested in manufacturing,” he said. “Anybody who’s an energy user is just going to disappear.”