Key facts
- Ineos is pausing production at its three UK plants in Hull, UK.
- The company blames high UK gas prices for the decision.
- Gas prices in the UK are reportedly 12 times higher than in the US.
- The facilities produce raw materials for pharmaceuticals, clothing, cosmetics, detergents, construction materials, and military explosives.
- Up to 1,000 staff will be affected by the production pause.
- Ineos is seeking tariff protections against Chinese products from UK and EU governments.
Billionaire Sir Jim Ratcliffe's industrial giant Ineos is pausing production at its three plants in Hull, UK, citing high natural gas prices as the primary reason for the decision. The company stated that UK gas prices are twelve times higher than in the US and eight times more expensive than the coal-based processes used by Chinese competitors, making its operations uncompetitive.
Sir Jim Ratcliffe said the company is being "forced to mothball some of the most efficient plants in Europe" due to the cost. The affected facilities produce essential raw materials used in pharmaceuticals, clothing, cosmetics, detergents, construction materials, and military explosives across the UK and Europe, with gas being a key ingredient in their production.
The move will impact up to 1,000 staff, with 245 working directly at the sites. However, workers will reportedly be retained while Ineos explores options such as directly purchasing liquefied natural gas (LNG) from the US at lower prices, a process that could take up to a year, or waiting for gas prices to decrease.
Ineos is also urging the UK and EU governments to implement tariff protections against Chinese products. One plant produces acetic acid, used in paint and glue; another makes acetic anhydride, an ingredient for aspirin; and the third produces ethyl acetate, a solvent. Sir Jim Ratcliffe has previously criticized the government's energy policy as "economic vandalism on an industrial scale."
The wholesale price of natural gas in the UK and Europe has nearly doubled since July, partly due to disruptions in supplies through the Strait of Hormuz. Ineos claims its Humberside plants are among the most efficient globally, with half the carbon footprint of US rivals and one-eighth that of Chinese equivalents. Two plants are already shut, with the third set to halt operations shortly. This follows recent criticism from Sir Jim Ratcliffe regarding UK government policy, taxes, and immigration.