Impact of Rising Energy Prices: INEOS Closes Last Ethanol Plant in the UK

On January 13, INEOS announced the closure of its last synthetic ethanol plant in the UK, a move that will affect hundreds of jobs.

In a statement, INEOS remarked, “The UK was once a major force in the chemical industry, employing a significant number of skilled workers. However, in the past five years, ten large chemical companies have shut down.” In stark contrast to the US, the UK has not built a new chemical plant in over a generation.

The Scottish ethanol plant located in Grangemouth is one of only two synthetic ethanol facilities in Europe, boasting an annual capacity of 180,000 tons. Since beginning production over 40 years ago, it has generated enough alcohol to fill 25 billion bottles of Scotch whisky.

While INEOS emphasized that all employees from the ethanol plant will be redeployed to the chemical business in Grangemouth, approximately 80 individuals will still face unemployment, with over 500 jobs indirectly impacted.

Over the past five years, energy prices in the UK have doubled, now standing at five times higher than in the US. INEOS Chairman Jim Ratcliffe stated, “The deindustrialization of the UK does nothing for the environment; it merely shifts production and emissions elsewhere. The UK, particularly the North, needs high-quality manufacturing and its associated jobs.”

Ratcliffe further warned, “We are witnessing the extinction of a major industry as chemical manufacturing here has lost its ‘vitality.’”

INEOS is calling on the UK government to take action for the benefit of British manufacturing. This includes developing an energy policy that provides globally competitive prices for natural gas and hydrogen; introducing an emissions trading scheme that supports both industry and decarbonization; and implementing a trade policy that bolsters domestic manufacturing without incentivizing imports.

On March 19, 2024, INEOS announced plans to close the Scottish ethanol plant in the first quarter of 2025. The decision followed extensive review, citing a decline in European ethanol demand and increased import pressures from other regions, which have left the plant in a state of continuous loss for several years.

INEOS is a multinational chemical company involved in various sectors, including petrochemicals, specialty chemicals, oil, and gas, with annual revenues reaching $55 billion. The company operates 173 plants across 36 businesses worldwide.