Billionaire tycoon Jim Ratcliffe has blamed the rising cost of energy and high carbon taxes for the decision to close down part of Scotland’s largest industrial complex.
Energy giant Ineos has shuttered its ethanol production facility at Grangemouth amid continued uncertainty about the wider site’s long-term future.
Ratcliffe, the CEO of the multinational conglomerate, said: said: “We are witnessing the extinction of one of our major industries as chemical manufacture has the life squeezed out of it.”
The ethanol plant is separate to the oil refinery at Grangemouth which is due to close in the spring, with the loss of around 400 jobs.
Ineos has insisted its employees involved in ethanol prodction would be redeployed across its wider chemicals business on he Forth.
Grangemouth had been manufacturing synthetic ethanol – which is predominantly used by the healthcare and pharmaceutical sectors – for more than four decades.
It is essential for the manufacture of many pharmaceutical drugs, but the Grangemouth plant was one of only two in Europe.
It had the capacity to produce 226 million litres per year – the equivalent to filling 90 Olympic-size swimming pools – but Ineos said the the UK chemicals industry, like other energy intensive industries, was struggling to be competitive in the global market.
According to the firm, 10 large chemical plants in the UK have closed in the last five years along with no new sites constructed “for a generation”.
Ineos said energy prices in the UK had doubled in the last five years, and are now five times higher than they are in the US – saying that puts companies here at a huge disadvantage.
The firm also said that given many countries outside of the UK and the European Union have no carbon reduction trading schemes or taxes in place, cost differentials could be significant.
And while Ineos said it had cut carbon emissions from its Grangemouth site by almost 50% over the last two decades, it said the next steps on its journey to net zero would require significant investment and government support.
The firm is calling on the the UK Government to act by producing an energy policy that provides globally competitive pricing of natural gas, and hydrogen, as we move towards net zero.
A UK Government spokesperson said: “This is very disappointing news from Ineos.
“Although the company has said affected employees will be redeployed elsewhere across the site, this announcement will still cause concern for workers and their families.
“This is yet another example of the failure of Scotland’s two governments to have had a credible industrial strategy over the past 14 years.
“That is why the UK Government is developing an industrial strategy that works for Scotland and the whole of the UK, but that comes after over a decade where Scotland’s industries had no joined-up plan for growth.”
The spokesperson continued: “Before July last year there was no plan to support the Grangemouth workers.
“Within a matter of weeks, and working with the Scottish Government, we announced £100 million to support the local economy and create jobs, and launched Project Willow to explore options for a sustainable industrial future for the wider Grangemouth site.”
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