Ineos, the industrial conglomerate led by Sir Jim Ratcliffe, has announced the suspension of production at its three chemical manufacturing facilities in Hull. The company stated that the decision was driven by the high cost of natural gas in the UK, which it claims is 12 times more expensive than in the United States and eight times higher than the coal-based energy used by competitors in China.

The affected facilities, operated by Ineos Acetyls, produce essential chemicals used in products ranging from food and pharmaceuticals to paints and adhesives. According to the company, two of the three plants have already ceased operations, with the final unit expected to shut down shortly. The move impacts approximately 1,000 employees, though reports indicate that staff will be retained while the company explores options, including the direct procurement of liquefied natural gas (LNG) from the US.

Sir Jim Ratcliffe criticized the UK government’s energy policy, labeling it "economic vandalism on an industrial scale." He argued that despite the Hull sites being among the most efficient in the world with a significantly lower carbon footprint than international rivals, they are unable to remain competitive under current pricing conditions. In response, Ineos is lobbying the UK and EU governments to implement tariff protections against Chinese imports.

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The Department for Business, Innovation, Science and Trade acknowledged the difficulty of the situation for the local workforce. A government spokesperson noted that support measures, including £350 million in co-investment funding and existing trade protections, have been established to assist the chemicals sector in managing energy costs.

This production halt follows a period of broader economic pressure, with wholesale natural gas prices in the UK and Europe nearly doubling since July, partly due to supply disruptions in the Strait of Hormuz. Ineos previously reduced its workforce by 20% last year, also citing high energy costs and international competition.

Source: BBC News