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Europe’s green taxes risk destroying jobs and industry, Sir Jim Ratcliffe warns

Jim Ratcliffe
Sir Jim says Ineos has first-hand experience of the ‘flawed European approach’ - Martin Rickett/PA

Europe’s green taxes are driving away investment and risk destroying its €1 trillion (£860bn) chemicals industry, Sir Jim Ratcliffe has warned.

In an open letter to Ursula von der Leyen, Sir Jim, the chairman and founder of Ineos, said Europe was “sleepwalking towards offshoring its industry, jobs, investments, and emissions”.

Sir Jim said the four key global regions for chemical manufacture were the US, Middle East, China and Europe. But soaring energy prices and net zero policies aimed at cutting emissions meant the Continent was “struggling” while the others flourished.

In a separate speech at the European Industry Summit on Tuesday, Sir Jim said: “The cost of gas in Europe is five times more expensive than in America. And electricity is still four times the price in Europe as in America. We in the chemicals world have to pay for that.


“Carbon taxes, … are a burden that manufacturers in Europe have to carry, but they don’t apply to imports. If you look at Ineos today, we’re paying about €150m, but by 2030 that would rise to €2bn. That’s just not sustainable.”

Sir Jim also warned that it had become almost impossible to get planning permission for new chemical plants.

He said: “Modern chemical technology is much much cleaner … Europe is still very large in chemicals – but the whole footprint [plants] are 30-50 years old. It’s impossible to renew them because the permitting legislation in Europe is so difficult.”

Brussels launched the first phase of its carbon border tax in October in an effort to protect European industries from cheap foreign imports. It will mean imports of carbon intensive goods such as steel and cement will be subject to a levy from 2026.

Economists speaking in front of the Lords Economic Affairs Committee on Tuesday warned that the cost of net zero will be far greater than the public is made to believe.

Olivier Blanchard, the former chief economist of the International Monetary Fund, said: “The public does not believe or has not been made to understand that is going to be costly for them. It is going to be costly and that message has to be sent out.”

Sir Dieter Helm, an economics professor at Oxford University and former adviser to Boris Johnson, said it was “delusory to think” that the net zero transition would pay for itself.

He added: “It’s much, much more expensive than people imagine.”

Sir Jim said that Europe’s approach to cutting emissions, by punishing companies with carbon taxes, was the wrong approach.

He said: “America has the Inflation Reduction Act so instead of using the stick they’re using the carrot of putting $500bn of government aid to encourage technologies that will improve the carbon footprint of America.

“I’m not suggesting Europe should have an identical approach [to the US ] but there is a fundamental difference between the stick and the carrot. I don’t think the stick works very well in Europe, because the chemical industry is in decline.”

Sir Jim’s accompanying open letter to Ms von der Leyen warned that without changes in policy there would be “little left” of the European chemicals industry.

He added: “The trajectory for European chemicals has been declining for 20 years. Once the largest chemical sector in the world, it has seen no large builds during this time, unlike the USA, China and the Middle East.

“Unless the European government addresses high energy costs, carbon taxes and renewal there will be little left in another 20 years.”

Sir Jim said Ineos had first-hand experience of the “flawed European approach”. It had invested €4bn in a new petrochemicals facility in Antwerp – only for it to have its licence taken away over what it said were “trivial” nitrogen oxide emissions equivalent to a family barbecue.

Ineos operates at 194 sites across 29 countries, generates $61bn annually and employs over 26,000 people.

Last month Ineos Group said profits in 2023 slumped to €1.7bn from €2.8bn a year earlier, blaming high inflation and interest rates, as well as energy prices for hitting demand.

Last autumn the company announced plans to close its refinery at Grangemouth, which is linked to a petrochemical plant, over rising UK costs.

It followed warnings earlier in 2023 from Sir Jim that the UK government was taxing its North Sea oil and gas industry “to death” by imposing new windfall levies.

In May 2014, Sir Jim Ratcliffe wrote to the then President of the European Union Jose Manuel Barroso, expressing his concerns about the future of the European chemical industry.

An Ineos spokesman said: “Sadly, many of those fears have subsequently been proved correct as the industry now finds itself in the current situation.”