Ineos Halts Hull Chemical Plants Citing UK Gas Cost Gap
Ineos is mothballing three sites in Humberside, impacting 240 direct jobs, citing a 12-fold gas price difference versus the US.
Key points
- Ineos is mothballing three Hull chemical plants because UK gas prices are twelve times higher than US rates.
- The decision impacts 240 direct employees and threatens 4,000 jobs across the local supply chain network.
- The UK government introduced a 350 million pound scheme and electricity discounts to support the chemicals industry.
Ineos has suspended operations at three chemical plants in Hull due to prohibitive energy costs. The company stated that UK gas prices are twelve times higher than those in the United States.
Production ceased at two sites immediately, with the third closing within days. Approximately 240 employees work directly at these locations, facing immediate operational disruption.
Energy Costs Drive Strategic Withdrawal
Jim Ratcliffe described UK gas prices as ridiculous compared to global competitors. He noted that Chinese plants use coal, which is eight times cheaper than British gas.
The energy gap renders efficient European facilities uncompetitive in the global market. Ineos claims it cannot maintain profitability under current UK energy pricing structures.
Economic and Environmental Consequences
A permanent closure would affect 4,000 jobs across the supply chain in Humberside. Ratcliffe warned that outsourcing production increases global carbon emissions significantly.
He argued that US replacements double carbon emissions compared to local production. Chinese imports increase the environmental burden by a factor of eight.
Government Support Measures Announced
The UK government launched a 350 million pound co-investment scheme for the sector. Officials are also preparing discount schemes to lower electricity bills for manufacturers.
One scheme aims to cut bills by 25 percent for 10,000 businesses. A supercharger initiative will save over 400 million pounds annually for intensive users.
