Sir Jim Ratcliffe, billionaire chairman of chemicals giant Ineos, has launched a scathing attack on Britain’s carbon emissions tax, warning it is “killing manufacturing” and stifling efforts to improve energy efficiency.
His comments come as firms across the country prepare to settle their 2024 carbon tax bills under the UK Emissions Trading Scheme (UK ETS). The scheme, designed to reduce greenhouse gas emissions by making it more expensive to burn fossil fuels, has been branded by Ratcliffe as counterproductive in its current form.
Ineos’s plant at Grangemouth, one of Scotland’s largest industrial sites, is facing a £15 million bill for its 2024 emissions alone. Sir Jim said the cost is “a heavy blow” for the company and for the wider manufacturing sector, which he claims is already reeling from high energy prices and post-pandemic economic volatility.
“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,” he said. “The irony isn’t lost on us.”
He warned that the cumulative effect of high energy prices, environmental levies, and increasing regulatory burdens is driving industry overseas, where emission regulations are often less strict. “A tax designed to reduce emissions is, in practice, killing manufacturing, making the UK more dependent on imports, and is increasing global emissions,” Ratcliffe added.
The UK ETS replaced the EU’s version after Brexit and is part of the Government’s plan to reach net zero emissions by 2050. It places a cap on the total amount of greenhouse gas companies can emit, allowing firms to trade emission allowances.
However, Ratcliffe says the scheme is punishing rather than supporting businesses that are trying to invest in decarbonisation.
“This is not just Ineos – this is a reality for British manufacturers up and down the country: carbon emissions, taxes and excessive energy costs are squeezing the life out of the sector,” he said. “Give us competitive energy costs, give us the incentives to invest in new assets and to play our part in building a strong, sustainable industrial future.”
His comments follow a challenging year for Ineos, which saw profits wiped out amid mounting debt and volatile energy markets. The company reported a €71.1 million (£60.5 million) loss in 2024, compared to a €407.8 million (£347.3 million) profit the previous year. Despite this, revenues rose nearly 9% to €16.2 billion (£13.8 billion).
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At the end of 2024, Ineos’s debt pile stood at €10.6 billion (£9 billion), putting further strain on its ability to invest in energy transition projects.
In response to Ratcliffe’s remarks, a spokesperson for the Department of Energy Security and Net Zero defended the carbon trading system, saying:
“Our mission is for clean power by 2030 because clean, homegrown energy is the best way to protect billpayers and boost Britain’s energy independence. A strong UK emissions trading scheme will play a key role in this, driving green investment as part of a broader industrial strategy, creating jobs and growing the UK’s economy.”
However, industry groups have echoed Ratcliffe’s concerns, warning that without targeted support, the UK risks deindustrialisation and losing its competitive edge in global manufacturing.
Many experts argue that while decarbonisation is essential, it must be implemented alongside pragmatic industrial policy that supports businesses in making the transition without undermining their global competitiveness.
As the UK forges ahead with its net zero ambitions, the clash between environmental goals and economic reality is becoming increasingly sharp. The Government’s challenge now lies in balancing its climate targets with the survival of its industrial base.
Should the Government revisit the structure of its emissions trading scheme, or are tough measures needed to meet climate goals?
