Sir Jim Ratcliffe: Businesses can’t afford ‘heavy blow’ of net zero taxes
INEOS founder Sir Jim Ratcliffe has slammed UK net zero policies as unaffordable and claimed carbon taxes are “killing manufacturing”.
The Manchester United co-owner described payments to be made by INEOS’ Grangemouth as part of the UK Emission Trading Scheme (ETS), which puts a financial cost on carbon emissions, as “yet another tax bill” that would prevent investment in green technology.
Ratcliffe claimed that Grangemouth faced a tax bill of £15m due to emissions by petrochemicals infrastructure and added that it could rise to £65m if left unpaid, a figure he described as “extraordinary”.
“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 ETS is based on a similar model implemented across the European Union as firms can trade emission allowances at auctions, with a cap on the total amount of carbon emitted to be reduced over time.
The last Conservative government introduced the scheme after Brexit but the Financial Times reported last year that Labour, led by net zero secretary Ed Miliband, would expand align it more closely with the EU.
Ratcliffe said the pricing system was hampering the UK manufacturing sector at a particularly difficult moment where other cost pressures are mounting up.
“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.”
Net zero is making UK ‘dependent on imports’
The petrochemicals billionaire’s sharp criticism of the ETS follows several public comments in which he has blasted net zero policies, including government plans to shut down North Sea oil and the continuation of windfall taxes on energy firms’ profits.
Ratcliffe reiterated that he shared government ambitions for a “greener future” but suggested that policies which pile costs on UK firms would not result in lower carbon emissions.
“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,” he said.
“The UK loses jobs, loses expertise, and becomes reliant on imports with a heavier environmental footprint.”
“A tax designed to reduce emissions is, in practice, killing manufacturing, making the UK more dependent on imports and increasing emissions.”
Ratcliffe was among those to move manufacturing away from Britain after INEOS ditched plans to open a car factory in Wales as it opted to open one in France.
He said at the time that European sites were more attractive.
There appears to be some appetite within the Labour government to ease net zero policies.
Rachel Reeves told a panel in Washington DC that environmental regulations had become “absolutely insane” as she said that they were “stopping good things from happening”>
“Environmental regulations are now the biggest barrier to investing in renewable energy in the UK,” Reeves said.
“That is not the purpose of environmental regulation but they’re the things that are holding up pylons being built. They’re stopping wind farms from being built.”
Energy secretary Ed Miliband has taken on a more militant view on net zero policies, accusing his opponents, including Reform UK’s Nigel Farage, of “nonsense and lies” for suggesting the UK’s carbon targets were hammering British industries.
This story was updated at 12.43 on 29 April to reflect that the refinery in Grangemouth is unrelated to the carbon taxes.