Jim Ratcliffe, chemical entrepreneur and football investor, rages against European energy policy.
The head of the chemical company Ineos, Jim Ratcliffe, is not only one of the richest Britons and a dynamic investor – he finances the Manchester United football club, the Mercedes-Benz Formula 1 team, and, as a side project, is building his own Grenadier off-road vehicle in a former Smart factory in France.
The 72-year-old self-made billionaire also enjoys his role as an outspoken critic and repeatedly speaks his mind – from his perspective, at least.
Now he's speaking out again, and his anger is palpable: If Europeans don't manage to lower energy costs, abolish the "stupid" CO2 taxes, and protect their borders from cheap imports, "then there will soon be no chemical industry left to protect," he tells the F.A.Z.
His demands are simple: abolish the CO2 tax, abolish environmental taxes, abolish energy taxes. And impose tariffs to protect European industry. Europeans pay 15 percent on exports to the USA, while the Americans pay zero in the other direction. European industry is unprotected by its own policies. When confronted with the argument that America and China would react to any trade restriction with further trade restrictions, and that Europe could never be completely self-sufficient anyway, he responds with a counter-question: "And what does that mean?" "So, should we just give up?"
Ratcliffe considers the financial border adjustment for imports with high CO2 emissions, as decided by the EU, to be a futile endeavor. "That's not going to happen in a million years." He argues that it would require an army of people to figure out what the "correct" CO2 tax should be on an iPhone or a pair of sneakers. "It's theoretical nonsense." The consequences, he says, are dramatic: chemical plants in Europe would be shut down, and their products replaced with those from China. However, China's economy is based on coal. Therefore, the carbon footprint of their products is many times higher. The CO2 tax is consequently not only harmful but also foolish. "We're losing jobs, we're losing added value, and we're making the planet a worse place because we're releasing more carbon into the atmosphere."
Despite Ratcliffe's blustering, he has written a growth story in the European chemical industry that is unparalleled. As an employed manager, he led a management buyout of his employer BP's chemical plants in Antwerp in 1998, laying the foundation for Ineos, one of the world's largest chemical companies. He has consistently acquired non-core businesses from oil companies like BP, as well as chemical companies like BASF, Bayer, and Lanxess. According to its own figures, the diversified group now generates €55 billion in revenue and employs 24,500 people, 4,500 of whom are in Germany. The industry portal ICIS estimates the pure chemical sales at €38 billion.
However, the business with basic chemicals is particularly dependent on favorable energy prices, and that is a problem for Ratcliffe. The holding company is making a loss, and due to the numerous acquisitions, net financial debt has grown to eleven billion euros. His "side businesses" are also performing poorly. The off-road vehicle is not yet profitable. To circumvent US tariffs, the group may relocate production to America. To curb the losses of Manchester United, he has imposed a cost-cutting program on the club. He prematurely terminated an expensive sponsorship contract with the New Zealand national rugby team, thereby triggering a legal dispute.
In addition, Ratcliffe announced the construction of a new large-scale petrochemical plant (cracker) in Antwerp shortly before the crisis. It is expected to cost around four billion euros – one of the largest investments in the European chemical industry in many years and the only new cracker construction in decades. Experts, however, believe that there are already far too many crackers in Europe. Why doesn't he stop the project? He says it's 80 percent complete, too late to stop it. At least, he argues, it will be the most environmentally friendly cracker in Europe, consuming relatively little energy, and the CO2 tax should be comparatively low.
However, Ratcliffe is not under any illusions. He has calculated that the Ineos plant in Cologne already faces 250 million euros in higher costs compared to a similar plant in America – 100 million in the form of CO2 taxes and 150 million more for gas and electricity. "Over ten years, that's 2.5 billion euros. And that's simply too much. We can't survive with this level of competition."
Ratcliffe sees the chemical industry in Europe in a "terrible situation," squeezed between the US and China, burdened with high taxes, and without protection from its government. China, on the one hand, decided years ago to move away from gas, since China wanted to be independent of raw materials and therefore built up production capacities domestically; however, the country didn't stop there, but continuously expanded these capacities because building chemical plants there is much cheaper and labor costs are much lower. Now China has to export to keep its factories running at full capacity.
The United States, on the other hand, has extremely competitive energy prices. According to Ratcliffe, gas and electricity in Europe cost four to five times as much as in the US, and there is no CO2 tax there. Therefore, enormous sums have flowed into the American chemical industry in recent years.
In Europe, however, energy costs are not competitive, and the CO2 tax has quadrupled since 2020. Many factories have already closed, he says, and more will follow. According to him, eight of the ten largest manufacturers in Europe have decided not to invest in the continent at all anymore. He himself has just closed two smaller production plants in the Ruhr area, and another in Hull, UK, adding that Europe is committing "industrial suicide."
More and more chemical companies are now joining the call for the abolition or at least a significant reform of the European emissions trading system. In an interview with the Frankfurter Allgemeine Zeitung this week, Evonik CEO Christian Kullmann, formerly president of the German chemical industry association VCI, also called for changes. However, the opinion in the industry is not unanimous. BASF CEO Markus Kamieth, although also a critic of emissions trading, warns against dramatizing the situation. According to him, the industry can live with higher energy prices. "There are only a few exceptions where the price difference really harms the competitiveness of production in Europe. This affects a few basic raw materials," he recently told "Wirtschaftswoche."
Ratcliffe is speechless at this quote. He says he's sorry, but he completely disagrees. He presents a different picture: In 2000, 25 million tons of ethylene were produced in both Europe and America, while China produced five million. By 2030, production in China will rise to 100 million tons, in America to 50 million tons, and in Europe it is expected to be halved. "Don't tell me that energy costs in Europe have no impact. We've simply been left behind."
What conclusions he draws from this predicament, whether he will restructure or downsize the company? The usually outspoken and angry entrepreneur remains silent on this. He only says this much: "We're simply trying to survive in Europe." All investments are flowing into the USA.”” [1]
1. "Industrieller Selbstmord, sinnlos und dumm". Frankfurter Allgemeine Zeitung; Frankfurt. 10 Oct 2025: 22. Von Bernd Freytag, Mainz
Komentarų nėra:
Rašyti komentarą