INEOS has issued an urgent call for European politicians to make an “eleventh-hour” intervention to save the chemical industry. During a session addressing the European Commission’s Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, Rob Ingram, CEO of INEOS O&P Europe, outlined the critical challenges facing the sector and proposed immediate remedial actions.
Ingram emphasised that the chemical and plastics industry holds strategic importance for Europe, providing vital raw materials for virtually all value chains spanning medical and pharmaceutical, aerospace and transportation, food and agriculture, information technology, defence and security, and renewable energy sectors. However, he characterised the industry as being in crisis, with closures announced almost monthly. During 2023-2024 alone, more than 11 million tonnes of capacity has been announced for closure affecting 21 major sites across Europe.
Whilst acknowledging headwinds including low demand and global overcapacity, Ingram identified the key challenge as Europe’s loss of competitiveness compared to other regions. European producers face high electricity costs, high gas costs, and unique exposure to punitive CO₂ taxation. He illustrated this by noting that a typical cracker in Europe pays approximately €150 million more annually in gas, power, and CO₂ costs than an equivalent plant located on the US Gulf Coast, making European producers unable to compete effectively.
Compounding these challenges, Ingram noted that tariff changes between the EU and US support imports into Europe whilst simultaneously punishing European exports. He stated that bold action is needed immediately to maintain a viable European chemicals and plastics industry.
Ingram outlined required immediate actions including restoring competitive energy prices through removal of green levies and reduced grid fees; providing relief from carbon taxes with complete system restructuring; freezing Free Allocations at current levels; reducing CO₂ certificate prices; relaxing investment support rules at EU and Member State levels; introducing trade protections or compensation mechanisms; and reducing and simplifying regulations, particularly for SMEs.
Regarding funding, Ingram noted that the EU Innovation Fund contains approximately €40 billion, the EU Modernisation Fund has close to €60 billion available, and the EU-ETS scheme raises more than €40 billion annually. He argued these funds should be redirected and made fit-for-purpose, with selection criteria amended to support existing projects improving reliability, efficiency, competitiveness, or emissions—projects currently on hold due to affordability constraints.
Ingram justified intervention by noting chemicals and plastics represents Europe’s fourth-largest industry, employing more than 1 million people directly and another 5 million indirectly. Beyond employment, Europe possesses strength in innovation, requiring a functioning industrial ecosystem for development. Without intervention, investments and innovation will migrate overseas.
He cited the circular economy and blue hydrogen with carbon capture as examples requiring support. Chemical recycling complementing mechanical recycling needs technology-agnostic regulations supporting existing assets, market stimulation for circular products, and border enforcement of circular product standards matching domestic requirements. Blue hydrogen with carbon capture should be recognised as the most viable option for decarbonising existing chemical production assets, whilst green hydrogen remains too expensive beyond niche applications.
Ingram warned that the current path leads to decarbonisation through deindustrialisation—a lose-lose scenario where Europe loses jobs, income, and strategic independence whilst global emissions actually increase as production moves to territories with lower emissions standards, with products then shipped back to Europe. He stated that the first and only measure of success that matters currently is decisive action before year-end, before it becomes too late to preserve the European chemical industry.
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