By Paul Homewood
h/t Ian Cunningham
From the Telegraph:
Britain’s biggest chemical plant is at risk of closure after surging energy costs left it struggling for survival.
The Olefins and Polymers (O&P) plant at Grangemouth, in Scotland, which manufactures products used by hundreds of UK plastic companies, is under threat because of surging bills and taxes levied on British manufacturers, its owner Ineos warned.
Stuart Collings, boss of the plant, told The Telegraph the site had been hit by a lethal combination of higher energy prices and carbon taxes, which had driven it into the red for several years and left its future uncertain.
He said: “Unless there is a significant turnaround in the next couple of years, then Ineos will have to make a very difficult decision about the future of Grangemouth.
“Ineos has had to effectively subsidise the Grangemouth business from profits it makes on other businesses around the world, and has done that for a number of years. That’s the only way we’ve been able to survive.”
Closing the plant would deliver a fresh blow to Grangemouth after Ineos earlier this year shut a separate oil refinery with the loss of 400 direct jobs and up to 5,000 more among its supply chain and contractors.
Mr Collings said his plant employed 900 people directly and thousands more through its supply chains – making it one of Scotland’s biggest industrial employers.
Full story here.
The problem of carbon taxes could be resolved with the stroke of a pen tomorrow – either abolish the scheme entirely or flood the market with permits, forcing the price down to a few pence.
According to the Telegraph, Grangemouth burns about a million tonnes of carbon dioxide a year, so the bill for INEOS is around £50 million a year. With Starmer agreeing to tie the UK carbon tax to the EU’s, which is about 20% higher, that bill is likely to increase.
Subsidies for renewables, both direct and indirect, are also making electricity prices 40% higher than they would otherwise be.
The Telegraph notes that “industrial electricity costs have risen from 14.8p per kilowatt hour in January 2021 to 26.0p at the end of 2024 – a 75pc rise. Similarly, industrial gas prices have more than doubled from 2.5p per kilowatt hour to 5.5p over the same period.”
This is misleading because energy prices were still depressed in the middle of COVID lockdowns.
The longer trend since 2010 shows an increase of about 40%, during which time the RPI has gone up 73%.
https://www.ofgem.gov.uk/energy-data-and-research/data-portal/wholesale-market-indicators
Click this link for the original source of this article.
Author: Paul Homewood
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