Ineos halts production at three UK plants amid soaring gas costs

Billionaire Sir Jim Ratcliffe has confirmed that his industrial conglomerate, Ineos, is temporarily shutting down production at three of its key facilities in Hull. The company attributed the decision to prohibitively high natural gas prices in the United Kingdom, which it argues have rendered domestic manufacturing uncompetitive on a global scale.

Ineos stated that gas prices in the UK are currently twelve times more expensive than those in the United States and eight times higher than the coal-based production methods utilized by Chinese competitors. Sir Jim described the situation as forcing the company to “mothball” some of Europe’s most efficient plants.

“We are being forced to mothball some of the most efficient plants in Europe, but with gas prices now 12 times the level in the US and 8 times that of China, we just cannot compete,” Ratcliffe said. He further criticized the current government’s energy policy, labeling it “economic vandalism on an industrial scale.”

The suspended operations involve plants that produce essential chemical feedstocks, including acetic acid for vinegar, paint, and glue; acetic anhydride, a primary ingredient in aspirin; and ethyl acetate, used as a solvent and in the decaffeination of tea and coffee. These raw materials are critical to various industries across the UK and Europe, ranging from pharmaceuticals and cosmetics to construction materials and military explosives.

Two of the three sites are already shut, with the third expected to cease production in the coming days. The disruption impacts up to 1,000 Ineos employees, 245 of whom work directly at the sites. However, the BBC understands that workers will retain their employment while the company attempts to secure cheaper liquefied natural gas (LNG) directly from the US—a process that could take up to a year—or waits for energy costs to decrease.

Ineos emphasized that its Humberside plants are among the most environmentally efficient globally, producing chemicals with half the carbon footprint of US rivals and only one-eighth that of Chinese equivalents.

This move marks the second time in less than a week that Ratcliffe, who also holds a significant stake in Manchester United, has publicly lambasted UK government policy. Last week, he told BBC News he had lost confidence in the country, describing it as “on the slide” due to high taxes and immigration levels.

Meanwhile, Ineos is urging both the UK and EU governments to implement tariff protections against Chinese imports. The call comes as wholesale natural gas prices in the UK and Europe have nearly doubled since July, exacerbated by supply disruptions through the Strait of Hormuz following the US-Israel war in Iran.

A spokesperson for the Department for Business, Innovation and Science expressed concern for the affected workers in Saltend. The department highlighted existing support measures, including a £350 million fund for strategically important chemicals producers, trade protections against foreign imports, and initiatives like the Supercharger and British Industrial Competitiveness Scheme aimed at reducing electricity costs for industry.