The closure of INEOS’ synthetic ethanol plant in Grangemouth, Scotland, marks a pivotal moment in the decline of the UK’s once-thriving chemical sector. This shutdown signifies the end of domestic production of synthetic alcohol, a key ingredient in many pharmaceutical drugs, and highlights the broader challenges facing the UK’s chemical industry.

Over the past five years, the UK has witnessed the closure of ten major chemical complexes, a trend that has severely affected the country’s industrial landscape. As a result, a highly skilled workforce, once the backbone of the UK’s chemical sector, now faces limited opportunities. Despite the rapid growth of the chemical sector in other countries like the United States, which has seen the construction of new chemical plants, the UK has not built a single new plant in over a generation. This stark contrast underscores the country’s struggle to maintain its position in the global chemical industry.

The root cause of this decline is largely attributed to the rising energy costs in the UK. Over the last five years, energy prices have doubled and are now five times higher than in the United States. This cost disparity has made it nearly impossible for UK-based chemical manufacturers to compete on a global scale. Energy-intensive industries like chemical manufacturing have been hit hardest, as companies are forced to absorb astronomical energy costs, rendering them uncompetitive and driving them to shut down operations.

The closure of the Grangemouth plant is especially significant as it was one of only two synthetic ethanol facilities in Europe. Over its 40 years of operation, the plant produced enough ethanol to fill the equivalent of 25 billion bottles of Scottish whisky, illustrating its importance not just to the UK’s chemical sector, but to the economy at large. The shutdown means that synthetic ethanol, a critical component for the pharmaceutical industry, will now have to be imported, further compounding the country’s reliance on foreign suppliers and reducing its industrial capacity.

Sir Jim Ratcliffe, Chairman of INEOS, expressed his concerns over the closure, warning that the de-industrialization of the UK would only shift production and emissions to other countries rather than solve environmental problems. He stressed that the country, particularly the North of England, requires high-quality manufacturing jobs to thrive. The closure of INEOS’ ethanol plant represents the latest casualty in a series of setbacks for the UK’s chemical sector, with the loss of manufacturing capability and skilled jobs potentially creating a void in the industry that may prove difficult to fill.

The implications of this closure are profound. The UK risks losing not only its industrial heritage but also the competitive edge it once held in global manufacturing. As chemical production moves overseas, the UK is left to grapple with the economic and social consequences of its shrinking chemical sector, marking a critical turning point in its industrial history. With rising energy costs, lack of new investments, and limited government support, the country faces an uncertain future in the chemical industry, with significant consequences for its economy, employment, and global competitiveness.