Ineos is mothballing three chemical plants in Hull after Sir Jim Ratcliffe said soaring gas prices and carbon costs had made production in Britain commercially uncompetitive.
The company is suspending its acetic acid, acetic anhydride and ethyl acetate units at Saltend Chemicals Park until further notice. Two units have already stopped production and the third is expected to follow within days.
Around 245 people are directly employed across the operations. Ineos says the plants also support almost 4,000 jobs across the wider Humberside supply chain, although that larger figure represents employment potentially exposed if the shutdown ultimately became permanent.
The announcement is a mothballing rather than confirmation of permanent closure. Staff are expected to remain employed while the units are taken offline, and Ineos has not announced redundancies as part of the immediate move.
Ratcliffe attacks gas prices and carbon costs
Sir Jim Ratcliffe, the founder and chairman of Ineos, said European regulators needed to recognise the damage being caused to the continent’s manufacturing base by high energy prices and what he described as unsustainable carbon taxes.
He claimed gas prices were now 12 times higher than in the United States and eight times the cost of coal-based production in China, leaving the Hull operations unable to compete.
Reuters reported that British front-month gas was trading at approximately $23.51 per million British thermal units, compared with about $2.84 for benchmark US gas at Henry Hub. The gap is particularly important for acetyl production because gas is both an energy source and an industrial feedstock.
Ineos has also argued that importing chemicals from plants operating under weaker environmental standards merely moves production, employment and emissions overseas instead of reducing global carbon output.
What the Hull plants produce
The Saltend site is Europe’s largest producer of acetic acid, acetic anhydride and ethyl acetate. The three chemicals are basic ingredients used throughout British and European manufacturing.
- Acetic acid is used in food preservation and in the production of inks, pharmaceuticals, cleaning products, textiles, paints and packaging.
- Acetic anhydride is used in medicines including aspirin and paracetamol, as well as detergents, plastics and treated wood products.
- Ethyl acetate is a solvent used in pharmaceuticals, printing inks, paints, adhesives, food processing and cosmetics.
Ineos previously described the Hull operation as the only industrial-scale European manufacturer of all three products. That has raised wider questions about the resilience of domestic and European supply chains if production remains suspended for a prolonged period.
Site received major emissions investment
The decision comes after Ineos announced a £30 million investment in the Hull site in 2025. The project switched parts of the operation to hydrogen fuel and was intended to cut carbon emissions by 75 per cent.
The company subsequently warned that the investment had not solved the commercial pressure caused by energy costs, carbon rules, weaker demand and competition from lower-cost imports. It also cut 60 jobs at the site last year.
Ratcliffe said it was difficult to believe that some of Europe’s most efficient plants were being forced offline, but insisted the cost difference with overseas competitors had become impossible to absorb.
Government points to industry support
A government spokesperson said ministers recognised the effect the decision could have on workers and the local economy, but described the mothballing as a commercial decision for Ineos.
The Government said it had taken action to support the chemicals industry, including a £350 million co-investment programme, measures against unfairly traded imports and schemes intended to reduce electricity costs for energy-intensive manufacturers.
However, Ineos’s principal complaint concerns the price of gas, which is required both to power and supply the Hull production process. The company is calling for lower industrial energy costs and stronger protection against cheap imported chemicals.
There is currently no stated date for production to restart. The future of the three units is therefore likely to depend on energy-market conditions, demand and whether Ineos believes the plants can again compete with producers in the United States and China.