INEOS closes its last remaining synthetic ethanol production plant in the UK

Posted on 13 Jan 2025 by James Devonshire

Chemical giant INEOS closed its last remaining synthetic ethanol production plant in the UK last week, citing high energy prices and high carbon taxes as primary reasons behind the decision.

The Grangemouth plant in Scotland, which was one of only two in Europe, began production more than 40 years ago. Since then, it has produced the equivalent of 25 billion bottles of Scottish Whisky. With a capacity of 180,000 tonnes per year, Grangemouth made enough synthetic ethanol each year to fill 90 Olympic sized swimming pools.

The UK, which used to be a major force in chemicals, employing a large and highly skilled workforce, has seen the closure of 10 large chemical complexes in the last five years alone and, in complete contrast to the USA, has not had one new chemical plant built for a generation.

Energy prices have doubled in the UK in the last five years and now stand five times higher than those in the USA. The UK cannot compete with such a huge disadvantage.

Ethanol, a synthetic alcohol which is essential for the manufacture of many pharmaceutical drugs, is necessary for many of the new blockbuster drugs. It will now be imported.

INEOS says that all affected direct employees associated with its synthetic ethanol plant operations will be redeployed across the chemicals business at Grangemouth. However, this will still result in a net job loss of 80 roles at Grangemouth, with a further impact of more than 500 indirect roles in the wider economy.

The company is calling upon the UK Government to take urgent action and act in the interests of UK manufacturing.

Sir Jim Ratcliffe, Chairman of INEOS said: “De-industrialising Britain achieves nothing for the environment. It merely shifts production and emissions elsewhere. The UK, and particularly the North, needs high quality manufacturing and the associated manufacturing jobs. We are witnessing the extinction of one of our major industries as chemical manufacture has the life squeezed out of it.”

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