Ineos pulls plug on UK investments moves billions to US amid tax and energy squeeze

Sir Jim Ratcliffe’s Ineos group has halted fresh investment in the United Kingdom and shifted its financial priorities to the United States, citing soaring energy costs and an unpredictable British tax regime as decisive factors in its strategy. Brian Gilvary, chair of Ineos Energy, confirmed that the company has redirected all new capital towards US assets, following a £3bn outlay there, and has ceased further funding for UK operations.

These decisions come in the wake of this year’s closure of the historic Grangemouth oil refinery in Scotland, after a century of operation. The company’s adjacent Olefins and Polymers plant, which supplies hundreds of UK plastics firms, is reportedly also under threat—blamed on uncompetitive energy prices and a burgeoning tax burden. Ineos’s move underscores a growing unease within the energy sector regarding the UK’s “unstable fiscal regime” for natural resources and energy.

High energy costs have been attributed to green levies, with industrial electricity expenses rising from 14.8p per kilowatt hour at the start of 2021 to 26.0p by the end of 2024, marking a 75 percent surge. Industrial gas prices have more than doubled in the same period, exceeding those seen across both the EU and the US. This severe cost inflation has slashed UK output in energy-intensive industries by a third within three years.

The Labour government’s decision to halt all new North Sea oil and gas exploration licences, alongside the increase in the windfall tax on oil and gas profits from 75 to 78 percent, has further dampened investment prospects. Sir Jim Ratcliffe has repeatedly warned that without more stable tax and energy policies, UK plants will struggle to operate competitively. Brian Gilvary highlighted the contrast in the US, where a stable fiscal environment and robust approach to energy security are allowing domestic production and exports to flourish.

Ineos Energy’s North Sea operations, which include the Breagh and Clipper South platforms as well as a stake in the Greater Laggan gas fields, supply directly into the UK’s gas transmission grid. However, like other UK offshore operators, Ineos’s assets and revenues have been hit hard by the windfall tax, and its subsidiary responsible for the major Forties Pipeline System has reported losses as clients cut investment.

The US has seen rapid expansion in domestic oil and gas production, now producing the equivalent of 13 million barrels a day, double the output of the 1990s, and moving from being a net importer to an exporter. This stands in stark contrast with the UK’s current policy direction. Government sources maintain that oil and gas will play a role in the UK energy transition for decades to come and that the windfall tax will end by March 2030 at the latest, but for now, Britain’s energy sector faces difficult headwinds.