Jim Ratcliffe writes to Ursula von der Leyen

Jim Ratcliffe, Chairman and CEO of Ineos, has written a letter to the President of the European Commission, Ursula von der Leyen, highlighting the extremely difficult situation facing the European chemical industry. In his letter, he stresses that the sector has now entered a genuine phase of contraction, noting that almost 200 chemical plants have ceased operations across Europe over the past five years.

“It is clearly a ‘critical industry’ for national security purposes”, writes Jim Ratcliffe. “Europe cannot run hospitals, feed people or build weapons without our key products. Since Covid we have seen a huge increase in both energy costs and carbon taxes but more recently we have been experiencing a further and even more difficult threat”.

“China is overbuilding its entire chemical industry, which it fully recognises is a critical ingredient for its national security. This intentional excess capacity (which is considerable) is being ‘dumped’ into our European marketplace at unsustainable prices”, explains the Ineos CEO. “The result is an accelerating rate of closure of our chemical industry. China does not have superior economics for chemical manufacture so it is very clear that when our industry has shut down, prices will rise rapidly and consumers will suffer. In addition, chemicals made in China have double the carbon footprint”.

According to Jim Ratcliffe, the Old Continent must therefore protect itself against unfair competition through measures that are implemented far more rapidly than has been the case to date. In the Chairman's view, safeguard measures and/or the Industrial Accelerator Act, currently under review, should also be applied to the chemical industry, one of the European Union's largest and most strategic industrial sectors, employing approximately one million people.

Jim Ratcliffe also identifies a second issue, namely Project ONE in Antwerp, a 5 billion euros investment to build an ethylene plant producing the world's lowest-carbon ethylene, an essential feedstock for the entire chemical industry, with a carbon footprint equal to one third of that of other European steam crackers.

As the CEO explains, “this is exactly the type of investment project that Europe should welcome and be supporting. Sadly, this has not been the case. Project ONE has not received any EU funding, despite its strategic, economic, and environmental benefits. Shockingly, it was considered ineligible for the EU Innovation Fund”.

“In March of this year”, concludes the Ineos Chairman, “you announced the ETS Investment Booster, with a budget of 30 billion euros. For Europe to maintain a viable chemical industry, this new scheme must be defined so that it can support projects such as ours, both in the planning stage, or in the execution phase. Europe needs to start giving the type of support to industry that our global competitors receive from their governments”.