INEOS, the chemical giant, announced the closure of three of its plants in the UK, citing the negative impacts of high natural gas prices in Europe on its operations. The company specifically pointed to the exorbitant gas prices in Europe that have reduced their competitiveness. With the closure of these three plants, Europe loses its last large-scale Acetyls production units.
Details of the Plants and Economic Impacts
The closed plants are located in Hull and are recognized as the last large-scale Acetyls production units in Europe. These raw materials are essential for producing vital materials in various industries including pharmaceuticals, clothing, cosmetics, detergents, construction materials, and even military explosives. The closure of these plants not only affects chemical production but also directly impacts jobs and livelihoods of workers in the Humberside region.
Gas Prices and Future Challenges
Sir Jim Ratcliffe, Chairman of INEOS, stated: "Gas prices are now 12 times the price in the United States and 8 times the price in China, and we can no longer compete under these conditions." While the benchmark gas price in the United States is about $2.83 per million British thermal units (MMBtu) weekly, wholesale gas prices in the UK have risen above $23 per MMBtu.
Ratcliffe also pointed to the environmental consequences of this situation, stating: "These irrational prices not only destroy our production base but also significantly increase the environmental burden, as alternative products are sourced from the United States with double the carbon emissions and from China with eight times the emission levels." He emphasized the need for changes in energy and carbon tax policies, saying: "The combination of high energy costs and unbearable carbon taxes is destroying Europe's production base."
In conclusion, Ratcliffe noted that current policies not only affect production in Europe but also encourage coal production in China and lead to widespread job exports to China and the United States.
