Sir Jim Ratcliffe has warned that Europe’s chemicals industry “faces extinction” and called on European Union leaders to ditch their carbon tax and increase tariffs to preserve it.
In an open letter published on Wednesday, the founder and owner of chemicals giant Ineos launched an excoriating assessment of the EU’s approach to the chemicals sector, which he said was in crisis.
“Chemicals in Europe is facing extinction,” the billionaire entrepreneur wrote. “Government policies have resulted in enormously higher energy prices and crippling carbon tax bills.”
“Government policies will shut all petrochemicals in Europe,” he added. “All our major competitors are planning for withdrawal from Europe as government has failed to act time after time.”
The intervention follows a similar salvo against the UK government from Manchester United owner Ratcliffe. Britain’s current industrial strategy meant his sector was “having the life squeezed out of it.“
Wednesday’s letter coincided with the EU’s publication of its Clean Industrial Deal, which the institution claimed laid out “concrete actions” aimed at “lowering energy prices, creating quality jobs and the right conditions for companies to thrive.”
The European Commission pledged to mobilise €100bn (£91.1bn) to bolster EU-made clean manufacturing and establish a ‘Union of Skills’ to invest in the continent’s industrial workforce as part of the plans.
A new Affordable Energy Action Plan was also among the raft of policies which promised to speed up the rollout of renewable infrastructure and improve energy usage efficiency.
But the commission stopped short of eliminating Europe’s carbon tax, known as the Carbon Border Adjustment Mechanism. Given the petrochemicals industry’s reliance on carbon-intensive refining processes, Ratcliffe’s key demand is to abolish this tax.
Also calling for tariffs on chemicals imports to protect domestic industries, the Ineos founder wrote: “The solution is to ban carbon tax, provide competitive energy for industry and incentivise growth and clean technology.
“We also need tariff barriers while these changes are being implemented or there will be nothing left.”
Ratcliffe said Europe – and by extension the UK where industrial energy prices are even more expensive – risked losing all its chemicals industry to the US, where prices were cheaper.
He claimed the gas bill at Ineos’s petrochemicals hub in Cologne is “€100m higher than its US equivalent”. This, the industry titan warned, has left “all [Ineos’s] major competitors… planning for withdrawal from Europe”.
Ratcliffe’s solutions, from which Ineos would stand to benefit enormously, are a reflection of US policy, he argued.
“This is the US approach,” he wrote, “where they value industry and its high value employment, and they are leaving Europe behind in their dust.”