INEOS chairman Sir Jim Ratcliffe has written an open letter to the president of the European Commission, Jean-Claude Juncker, expressing his concerns about Europe’s chemicals industry.
Sir Jim told president Junker: “Nobody but nobody in my business seriously invests in Europe. They have not for a generation. Everyone in my business does however invest in the USA, Middle East, or China, or indeed all three.The USA is in the middle of a $200bn spending spree on 333 new chemical plants. China has spent that sum annually for many years constricting its own chemical building blocks.”
Worldwide, chemicals is an immense industry, considerably bigger than the automotive sector with revenues of $4tn. In Europe, over one million people are directly employed in high-quality jobs by the chemical industry and five times that indirectly, but the industry is uncompetitive.
In the past decade Europe’s share of the world chemical market has halved from 30% to 15%. Europe has the world’s most expensive energy as well as strict labour laws, meaning employers are not keen to bring their business here. On top of this, green taxes have pushed investors to USA and China, where taxes are lower. The USA is investing heavily in its chemical industry, whilst also having the highest environmental standards for new builds and new chemical technology.
Europe remains an industry that has old environmental standards, scaring away investment with heavy green taxes.America’s new investments has meant new jobs, and it has improved environmental emissions – but Europe cannot seem to do the same.
INEOS recently announced it is investing $3.39bn in building an ethane gas cracker and PDH unit in Antwerp – the largest investment in European petrochemicals in a generation. But INEOS has unique access to its own low-priced, cost-effective shale gas from the USA, which it imports on its own ethane carrying Dragon ships. It does not have to pay for expensive European energy and feedstock.
Sir Jim ends his letter by saying: “Do not expect others to follow. They will be welcomed by the USA and China with a warm smile and a good strategy. Europe reminds me somewhat of the Charge of the Light Brigade immortalised in Tennyson’s wonderful poem, full of valour and good intention but the outcome will not be pretty.”
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