EUROPEAN INDUSTRY SUMMIT 2024
URGENT action is needed to stop Europe sleepwalking into off-shoring its chemical industry, jobs and investment. INEOS Chairman Sir Jim Ratcliffe warned that unless the European Commission tackled soaring energy costs, burdensome carbon taxes and encouraged investment in new chemical plants, there would be little left of an industry that was strategically important to Europe’s security.
“European petrochemicals has long been left behind by the USA, China and the Middle East because it struggles to compete,” he told industry leaders gathered at a European industry summit in Antwerp.
The European chemical industry was once the biggest in the world.
Although, over the years, it has lost ground to China, the US and the Middle East, it is still one of Europe’s most important sectors with revenues of one trillion Euros and supporting 20 million jobs.
But Sir Jim fears that could change so easily if the European Commission fails to understand what’s at stake.
“The chemical industry produces a lot of extremely important raw materials for all manufacturing businesses across Europe,” he said. “It provides a security of supply that has a strategic importance for Europe well beyond purely the size of the chemicals sector.”
At the recent summit, he highlighted the problems facing the industry and spoke from first-hand experience of the difficulties of getting the green light to invest €4 billion in a superior chemical plant using the very best technology.
Project One, as it is known, is the largest investment in the European chemical sector for a generation.
But one year after work started, with 10,000 workers employed worldwide on the project, the permit was withdrawn due to the plant’s nitrogen levels. “The levels were the equivalent of one family barbecue in a nature reserve once a year,” he said.
Sir Jim said high energy costs and carbon taxes were also killing the industry – and driving investment away from Europe.
Neither make sense, he said.
“The carbon taxes don’t apply to 95% of imports,” he said. “So we're not doing the world any favours if we're substituting relatively high quality production here in Europe, in terms of emissions, with poorer quality, less regulated production from other parts of the world.”
INEOS currently pays about €150 million in carbon taxes. The bill, though, is expected to rise to €2 billion by 2030.
“It is just not sustainable,” he said.
The cost of energy, though – due to Europe’s rejection of on-shore oil and gas and nuclear power – is undoubtedly the biggest headache facing the chemical industry.
“The cost of gas in Europe is five times more expensive than it is in America,” said Sir Jim. “America has cheap energy; we have expensive energy. The US are self-reliant today in energy. We are not.”
It is not the first time Sir Jim has expressed concern about the future of the European chemical industry.
In May 2014, he wrote an open letter to José Manuel Barroso, the then President of the European Union.
“Sadly, many of my fears have subsequently been proved correct as the industry now finds itself in the current situation,” he said.
The summit, which was held at the chemicals plant that INEOS shares with BASF in Antwerp, ended with a cry for help from industries seeking lower energy costs and less red tape to help revitalise Europe’s industrial landscape.
All went on to sign the EU Industrial Deal which they want Ursula von der Leyen, President of the European Commission, who was at the summit, to include in Europe’s Strategic Agenda 2024 - 2029.