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UK CHEMICAL INDUSTRY IN CATASTROPHIC DECLINE DUE TO HIGH ENERGY COSTS

Environment

UK CHEMICAL INDUSTRY IN CATASTROPHIC DECLINE DUE TO HIGH ENERGY COSTS

A report by Ed Conway of Sky News highlights the recent worrying decline in the UK’s chemicals sector

Ed Conway depicts Britain’s chemicals industry as undergoing an unprecedented collapse, with the possible closure of Inovyn’s Runcorn salt plant symbolising a final nail in the coffin of a once world‑leading sector. For centuries the UK was self‑sufficient and even dominant in the production of salt, drawn from natural Cheshire halite and used not just for food but as a critical input into pharmaceuticals, water treatment, plastics, explosives and other industrial processes. Today, Inovyn produces about half of UK salt; its shutdown would force reliance on imports for the first time in our modern history, threatening competitiveness in critical downstream industries such as food.

The salt crisis is part of a broader pattern; in the last decade 11 major chemicals plants producing key “foundational” chemicals have closed, often with little public notice. Britain has already lost domestic production of ammonia ( for fertilisers and explosives), sulphuric acid and soda ash, despite their centrality to food security, defence and manufacturing of glass, paper and other products. Output from the chemicals sector has fallen 20% in three years, a peacetime drop driven largely by high UK energy prices and carbon costs, (emphasis added). This has simply shifted production and investment to regions like China and the US even as the global chemicals market has grown to around 6 trillion dollars

Ed Conway’s report contains this graphic depiction of the decline of the UK chemicals sector

Industry figures argue that UK policy has been piecemeal; emergency 11th hour support for key assets such as the Grangemouth ethylene cracker is viewed as a sticking plaster rather than a comprehensive industrial strategy. Much of the remaining infrastructure is ageing kit originally built by ICI and is now fragmented and closures continuously accumulate without visibility, exemplified by the hollowed‑out Wilton site on Teesside. While plant closures help cut homegrown territorial emissions and support Net Zero targets, leaders warn of “deindustrialisation through decarbonisation”, with the UK losing up to 90% of its core chemical building blocks, replacing high-value, skilled industrial jobs and leaving a service‑heavy “geriatric Disneyland” economy unless government rapidly reforms its energy, carbon and industrial policy.

The full report can be found here:

https://news.sky.com/story/why-ending-the-manufacture-of-a-humdrum-substance-would-be-final-nail-in-the-coffin-of-an-industry-that-was-once-britains-pride-13494625

Recent and Recent-Past Closures in the UK

  • 1. ExxonMobil – Mossmorran Ethylene Plant (Fife, Scotland)

    Scheduled closure in early 2026. ExxonMobil is shutting the Fife ethylene production plant — one of the last such facilities in the UK — after about 40 years of operations due to inefficiency and high costs. This will leave the UK without domestic ethylene production- a substance used in the manufacture of numerous products.

  • 2. INEOS – Ethanol Production at Grangemouth (Scotland)

    Closed in 2024. INEOS shut the UK’s only synthetic ethanol manufacturing facility at its Grangemouth site; the company estimated around 80 direct job losses and wider impacts across the supply chain.

  • 3. Dow – Basic Siloxanes Plant (Barry, Wales)

    Closure announced; expected completion by end of 2027. Dow is closing basic siloxanes production in Barry — impacting ~220 jobs — as part of broader restructuring of higher-cost, energy-intensive assets in Europe.

  • 4. Mitsubishi Chemical – Billingham (Teesside)

    Plant permanently closed in 2025.

  • 5. CF Industries – Ince and Billingham (Cheshire)

    CF Industries closed its fertiliser plant at Ince and the ammonia plant at Billingham, with production now imported.

  • 6. BASF – Teesside (Hexamethylene Diamine)

    BASF shut its Teesside facility producing hexamethylene diamine, moving output to continental Europe.


Firms and Plants Currently at Risk of Closure

  • 1. INEOS Olefins & Polymers – Grangemouth (Scotland)

    This large chemical complex (ethylene and polymer production) is widely reported to be under threat due to high energy costs and carbon pricing. Industry bodies warn that without improved competitiveness (e.g., lower energy costs or carbon capture support), the plant could be shut in the coming years. This will be the country’s last ethylene production plant.

  • 2. Polymer and Petrochemical Assets of Multinationals

    Major international firms like SABIC, Dow, LyondellBasell, and others periodically review European assets — including UK sites — and have flagged strategic downsizing if competitiveness does not improve.

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