2 days Ago By David Bol
Ineos boss Sir Jim Ratcliffe has warned that high energy costs and carbon taxes are “squeezing the life out of” industry - stressing his company will be “forced to pause” investments needed to clean up operations at Grangemouth. The intervention comes after John Swinney warned that industrial communities cannot be “hollowed out” as he called for more government “interventions” to protect Scotland’s industrial future. Sir Jim has been on the receiving end of criticism from Scotland’s two governments over Petroineos’s decision to close its refinery at Grangemouth, which is losing £385,000 a day - despite concerns raised by the company five years ago.
The First Minister used his speech at the STUC congress in Dundee on Monday to appeal to the UK government to nationalise the refinery. Read more: Saving Grangemouth needs eye-watering amount of cash and political will to become a reality From Wednesday, UK companies will be required to pay for the cost of their carbon emissions in 2024 under the regulation of the UK Emission Trading Scheme (UK ETS). Sir Jim, the billionaire co-owner of Manchester United, has warned that these carbon taxes, alongside soaring energy prices, are de-industrialising Britain.
Ineos Grangemouth will have to pay £15m in tax for carbon dioxide emissions in 2024, which the company says is restricting its ability to decarbonise. If left unpaid, Ineos could be liable for up to £65m. Sir Jim said: “At a time when British industry is still finding its feet after Covid, facing uncertainty due to US tariffs, grappling with some of the highest energy prices in the developed world, and trying to compete against far more favourable conditions in the Middle East and the United States, this is another heavy blow.
Quite simply, businesses can’t afford it. “To meet this tax obligation, we will be forced to pause vital investment in projects that were designed to make our operations more efficient and more sustainable. The irony isn’t lost on us.
” Sir Jim stressed that it wasn’t only his company impacted by the conditions and that “this is a reality for British manufacturers up and down the country”. He added: “Carbon emissions taxes and excessive energy costs are squeezing the life out of the sector. You only have to look at British Steel at Scunthorpe to see the impact of an uncompetitive energy policy forcing the Government to spend taxpayers’ money on a rescue package.
We need action before we get to that stage. Read more: Inside Project Willow: How trees, waste and wind will transform Grangemouth “We all share the goal of a greener future. But we must ask – is this the right way to achieve it? “When manufacturing is pushed offshore, the emissions don’t disappear – they’re simply relocated, often to countries with less stringent environmental regulations and requiring transport.
The UK loses jobs, loses expertise, and becomes reliant on imports with a heavier environmental footprint.” Sir Jim has waned that “a tax designed to reduce emissions is, in practice, killing manufacturing” and “making the UK more dependent on imports and is increasing emissions”. He added: “We are calling for a rethink.
Not to walk away from climate goals, but to pursue them in a way that allows British businesses to lead the transition, not to be punished so that improvements aren’t affordable.” Read more: Revealed: How Labour hopes its clean power strategy will bring down Scots' bills by 2030 Speaking in Dundee, Mr Swinney praised the Labour government for moving to nationalise steel operations in Scunthorpe, but insisted that interventions by politicians should happen on a“wider scale than has been experienced up until now”. Mr Swinney said he was “absolutely focused on working with the trade unions and interested parties” to find a way forward for the site that “protects the skills and the employment that exists within that important resource”.
He added: “I want all options for Grangemouth’s future to be explored and I will ensure my government will work constructively with all partners to secure a just transition for Grangemouth with the workforce very much at the heart of that endeavour.” “The assurance I give today is that the Scottish Government will be willing to work with the United Kingdom Government to take the necessary steps to intervene in our industrial base, to secure the sustainability of that industrial base, because we cannot allow the industrial base of our country to be hollowed out. “We need to secure our industrial base for the security and the future of our country and my government will play its part, with the UK Government in enabling that to take its course.
” However, he also argued that the “global economic uncertainty” economies are facing at present “requires us all to revisit our priorities”. Here he said the UK government needed to “recognise the different landscape that we’re operating in” and change its fiscal rules. Read more: Renewables investment fears over Labour's energy price plan that would cut Scots' bills Mr Swinney’s calls came after the Project Willow report – which was funded by the Scottish and UK governments – set out a number of options for the future of the Grangemouth site.
However, it said that about £3.5 billion of private investment would be needed. The First Minister made his appeal after the general secretary of the GMB union, Gary Smith, accused Labour of “closing” down Aberdeen and warning about “a growing sense of betrayal” around GB Energy.
Mr Smith added: “Cutting off investment into oil and gas is bonkers. We could be getting investment into oil and gas that will allow us to create jobs. “Just switching off investment in the North Sea is absolute madness.
It’s bad for national security, it’s bad for jobs and the truth is it’s catastrophic for the environment because we are importing oil and gas, which is far more carbon intensive than producing it ourselves.” Asked if he believed GB Energy was a white elephant project, he said: “As it currently stands, I think people are feeling very, very disappointed and even betrayed ” He added: “I do fear that they have over-promised in terms of GB Energy.” Read more: Poll: Scots do not trust either SNP or Labour to fix soaring energy bills Speaking to journalists, Mr Swinney said the UK government “like people to believe that the establishment of GB Energy would reduce fuel bills by £300 pretty quickly”, adding that “the reverse is happening”.
He added: “There is, on that part of it, a real gulf between the rhetoric of the Labour government which promises lower fuel bills but is actually delivering higher fuel bills. “I think that is undermining GB Energy.” A UK Government spokesperson said: “Our modern Industrial Strategy will be designed and implemented in lockstep with the devolved Governments as well as local and regional leaders to make sure it is a UK-wide effort.
“The strategy will prioritise the high growth sectors most promising for future prosperity, creating the right conditions for increased investment and ensuring a lasting impact in communities across the UK.”.
