What is the story about?
What's Happening?
Sir Jim Ratcliffe, Founder and Chairman of INEOS, has called for urgent government intervention to save Europe's chemical industry, which is facing significant challenges. According to Ratcliffe, the industry is at a tipping point, with around half of Europe's ethylene production capacity expected to close by 2030. The sector employs 1.2 million people directly and 5 million across the supply chain, all of whom are at risk due to declining production and investment. High energy costs, carbon taxes, and US tariffs are cited as major factors undermining the competitiveness of European chemical producers. In contrast, US and Chinese chemical companies are expanding their output.
Why It's Important?
The chemical industry is a vital part of Europe's economy, contributing significantly to employment and GDP. Its decline could lead to increased reliance on imports for essential products, affecting sectors like water treatment, health, and defense. The industry's collapse would also hinder Europe's net zero ambitions, as imports from countries like China and the US would increase carbon emissions. The situation highlights the need for policy changes to reduce energy costs and provide tariff protection to maintain the industry's viability.
What's Next?
Ratcliffe has outlined three urgent actions for European politicians: removing green taxes and levies from energy costs, scrapping carbon taxes, and providing tariff protection. These measures are deemed necessary to prevent further decline and preserve the industry's strategic importance. The Oxford Economics report commissioned by INEOS emphasizes the pressures facing the industry and the need for immediate action to safeguard jobs and growth.
Beyond the Headlines
The challenges facing Europe's chemical industry reflect broader issues of global competitiveness and environmental policy. The industry's decline could have long-term implications for Europe's economic security and its ability to achieve sustainability goals. The call for government intervention underscores the need for coordinated policy responses to address these complex challenges.
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