INEOS is mothballing three chemical plants in Hull, placing thousands of jobs and the UK’s domestic supply of critical industrial materials at risk as the company faces continued pressure from soaring energy costs.
The chemicals group has taken the decision to suspend operations at its three world-scale acetyls units at Saltend, citing gas prices that are now 12 times higher than those in the United States. Two plants have already ceased production, while the third is expected to come offline within days. The facilities will remain mothballed until further notice.
The plants are Europe’s last remaining world-scale acetyls units, according to INEOS, producing chemical intermediates used in pharmaceuticals, food products, clothing, cosmetics, detergents, construction materials and high-energy military explosives.
The company said the operations support almost 4,000 highly skilled jobs across Humberside, alongside apprenticeship programmes, and supply customers throughout Europe.
Energy costs undermine competitiveness
INEOS said its Hull facilities use gas both as an energy source and a feedstock in the production process, making them particularly vulnerable to elevated energy prices.
European gas is now reportedly eight times more expensive than production based on coal in China, further widening the cost gap facing European chemical manufacturers.
According to INEOS, the Hull plants are among the most efficient in the world following repeated investment and operate with exceptionally low carbon emissions. However, the company warned that the cost disadvantage is forcing production towards regions with higher-emission manufacturing processes.
Material produced at the Hull facilities has a carbon footprint half that of equivalent US production and one-eighth that of Chinese material, INEOS claimed.
Jobs and industrial capacity at risk
Sir Jim Ratcliffe, chairman of INEOS, said the decision highlighted the consequences of Europe’s energy and industrial policies.
I’m sure people will find it hard to believe that 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.
Not only is the ridiculously high gas price destroying our manufacturing base and the jobs of hard-working people on Humberside, it is also massively increasing the environmental burden with replacement products supplied from the USA at double the carbon emissions and from China at 8 times the emission level.
Sir Jim Ratcliffe, chairman of INEOS
Ratcliffe called on European regulators to address the combination of high energy costs and carbon taxes, warning that current conditions risk accelerating the relocation of manufacturing capacity and jobs overseas.
“The UK government’s energy policy is leading to economic vandalism on an industrial scale, exporting jobs to China and the United States and driving up global CO2 emissions at a stroke,” he added.
The mothballing follows mounting concerns over the competitiveness of energy-intensive UK manufacturing, with chemical producers among those facing significant exposure to volatile gas and electricity markets.
While INEOS has not announced permanent closures, the suspension of all three Hull units underscores the potential consequences of sustained energy cost disparities for domestic industrial capacity and the supply chains that depend on it.
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