‘Bonkers’: Why Cutting Carbon Nearly Cost INEOS US$31m

INEOS Acetyls, the largest producer of acetic acid, acetic anhydride and ethyl acetate in Europe, has recently completed a pioneering, world-first investment at its Hull site, switching its fuel source from natural gas to low-carbon hydrogen. 

The result of this switch is a 75% reduction in emissions, which is the equivalent of taking 160,000 cars off UK roads.

INEOS’ net zero aim 

INEOS’ project is set to place its Hull site on a path to becoming the world’s first net zero producer of Acetic acid.

Acetic acid is a critical building block for food production, pharmaceuticals, synthetic fibres and speciality chemicals.

According to a press release on INEOS's website "it's exactly the kind of green industrial leadership the UK Government claims it wants". 

INEOS has set a company-wide goal to achieve net zero GHG emissions by 2050, aligning its targets with the Paris Agreement and developing site-specific climate roadmaps. 

The company is also planning to switch to renewable energy sources like wind, aiming to significantly reduce its reliance on fossil fuels and cut carbon emissions by more than one million tonnes of CO₂.

INEOS’ bonkers backlash

Despite active plans to decarbonise its plants and reach net zero, INEOS faced backlash from the UK Environment Agency (EA).

The EA was considering reclassifying the Hull site, which has been operating since the 1930’s, as a “new installation”.

The “new installation” classification was due to the Hull site switching to a cleaner fuel source.

“It’s bonkers. We’re being punished for doing the right thing,” said David Brooks, CEO of INEOS, in the company press release.

“We’ve invested to slash emissions and in return the government wants to ‘re-categorise’ our site, leaving us more than £23m (US$31m) worse off in the next couple of years. It sends entirely the wrong message.”

“This is yet another example of the UK Government, through red tape and misguided regulation, pushing industry offshore. 

“While countries like China and the US back their manufacturers, Britain penalises them for cutting emissions. 

“It’s perverse and it’s costing us investment, jobs and our industrial future.”

INEOS claimed that the potential impact of the decision was "a £23m (US$31m) cash drain over the next three years, imposed on a site that is already loss-making, at a time when it is also under threat from cheaper, higher-carbon imports from countries such as China, whose emissions per tonne of acetic acid are eight times higher than the UK’s."

It stated: “This is a prime example of regulatory madness, penalising those who invest in decarbonisation and setting a dangerous precedent for industry."

After investigating further, The EA redacted the penalty and confirmed that it will no longer re-categorise the site – saving INEOS £23m (US$31m).

How sustainable is INEOS?

INEOS takes a science-based approach to sustainability, focusing on measurable reductions in environmental impact while continuing to supply essential materials. 

By 2023, the company had reduced emissions by 22% from 2019 levels through clean energy sourcing, technology upgrades and operational efficiencies. 

INEOS is investing in energy-efficient infrastructure, such as Project ONE in Antwerp, which will be Europe’s most energy-efficient ethylene plant. 

The company is expanding use of wind power and developing products with recycled and bio-based feedstocks to support the circular economy. 

It is also advancing carbon capture and green hydrogen projects to decarbonise both its own operations and the wider industry. 

Sustainability performance is reported in line with recognised standards and independently audited. 

While challenges remain in decarbonising heavy industry, INEOS prioritises practical engineering solutions over marketing claims.