© Supplied by Ineos Ineos Acetyls has described a decision to reclassify its Hull site as a “new installation” following works as “madness”. The acetyl plant emissions allowance is on the line despite switching to hydrogen, the company said over the weekend.
These claims have been rejected by the Environment Agency, which said this was never the plan.
The company has reduced emissions at its Hull plant by 75%. It complained that an Environment Agency decision on the classification of the facility, it has lost access to allowances under the UK Emissions Trading Scheme (ETS).
Ineos Acetyls CEO David Brooks said the agency had decided to reclassify the plant following the move from natural gas to hydrogen. “As a result, we were set to lose our ETS allowances until 2028, creating a £23 million cash drain over the next three years.”
Directly contradicts
“Then, the moment we raised this publicly, the EA reversed course, telling the media that no such reclassification had ever been proposed. That directly contradicts what we were previously told.”
Brooks is now due to meet officials from the agency, Department for Energy Security and Net Zero (DESNZ) and Department for Business and Trade (DBT) on 1 July.
“To be clear, we’ve invested £30 million to decarbonise our site. Penalising us for doing the right thing is absurd. We’re not asking for special treatment, just not to be worse off for cutting emissions.
“We sincerely hope the Environment Agency hasn’t tried to quietly change its position and leave us holding the bill. But until we get formal clarity, our position stands.”
Ineos Acetyls has said the conversion of the Hull facility put it on a path to becoming the world’s first net zero producer of acetic acid. It has been operating since the 1930s, the company noted.
The agency denied it had ever planned to reclassify the facility.
“The operator will continue to receive free allocations under the UK Emissions Trading Scheme. This has always been the case and they continue to be calculated on activity data for the previous year,” a spokesperson said.
“We continue to work across government to engage with the company and address its concerns.”
Litmus test
The company has called for the plant to receive its 2026 and 2027 allowances as normal. The decision from the Environment Agency is a “litmus test” for the UK’s clean industrial investment plans, it stated.
The UK ETS hands out free allowances in February. The next acetyl plant emissions allowance, in February 2026, will be based on data from Ineos on 2025.
The company will need to provide a full year of data, by March 2026, to receive adjustments to its allocation. This is due in February 2027.
CEO Brooks is seeking a meeting with the Environment Agency this week. Ineos has not yet responded to a request for further comment.
Ineos bought the facilities in 2021 from BP.
The government released its Industrial Strategy last week, aiming to shore up domestic manufacturing by cutting energy prices. Ineos at the time noted that this would need more than just progress on power costs.
The country needs “far-reaching, immediate reforms on industrial gas pricing and carbon tax reduction are essential. Without them, investment, jobs, and UK capability will continue to drift overseas.”
It is not just the UK where Ineos has protested over high costs. It recently announced plans to halt phenol production in Germany, citing Europe’s “lack of energy competitiveness”.
There are a range of problems in the area for companies struggling with industrial policy. Vivergo Fuels could halt production at its bioethanol facility, losing 160 jobs, in September. While hundreds more jobs could be lost at Sabic’s Olefins 6 cracker.
Updated at 12:50 with a rejection of Ineos’ claims on the acetyl plant emissions allowance from the Environment Agency.
Updated July 1 at 10:16 am to include David Brooks’ response.
