Ineos Idles Three UK Plants Due to 12x Gas Price Gap
Ineos halts three Hull plants because European gas costs are 12 times higher than US levels, threatening 4,000 jobs.
Key points
- Ineos has idled three Hull plants, impacting nearly 4,000 skilled jobs.
- European gas prices are 12 times higher than US levels, making local production uncompetitive.
- The UK government has provided 350 million pounds in support for the chemicals industry.
Ineos has idled three chemical plants in Hull, UK. The move follows a sharp rise in European gas prices. The company cites an uncompetitive cost structure against US and Chinese rivals.
The decision affects approximately 4,000 skilled workers. These facilities produced acetyls, a key raw material for pharmaceuticals and construction. They were the last world-scale units of their kind in Europe.
Gas costs outpace US and China
European gas prices have doubled since the Middle East conflict began in February. Prices now hover around 86 dollars per megawatt-hour. This is 12 times the level in the US and eight times that of China.
Ineos stated it cannot compete at these energy rates. The company faces higher costs than producers in other regions. This price gap forces the halt of efficient European operations.
Environmental burden rises with imports
Shutting down local plants increases the environmental footprint. Replacement products from the US carry double the carbon emissions. Goods from China have eight times the emission level.
Ineos CEO Sir Jim Ratcliffe criticized current regulatory frameworks. He argued that high energy costs and carbon taxes are damaging the manufacturing base. The company warns this trend will continue if prices rise further.
UK government cites prior support
A UK government spokesperson called the decision concerning for workers. They noted that the government has already provided 350 million pounds. This funding targeted strategically important chemicals producers.
Ratcliffe previously warned of low gas storage levels. He claimed Britain could run out of gas during a cold snap. The government maintains it has taken bold action to support the industry.
