Over a hundred campaigners are asking the Scottish and UK governments not to bail out the petrochemical giant, Ineos, during the coronavirus crisis.
Reports have suggested that the company’s refinery at Grangemouth has asked for a loan of up to £500 million to help cope with the worldwide slump in demand for oil.
But Friends of the Earth Scotland, Greenpeace, fashion icon Dame Vivienne Westwood, other individuals and groups across Europe, are calling on ministers at Holyrood and Westminster not to support a business that they say causes climate and plastic pollution.
The Grangemouth refinery is run by Petroineos, a joint venture between Ineos group and the Chinese state oil firm, PetroChina. The chairman and chief executive of Ineos is Sir Jim Ratcliffe, who is reckoned to be worth £18 billion. He is listed as the UK’s third wealthiest person and lives in Monaco allegedly for tax reasons.
Petroineos directly employs 550 people at Grangemouth, and has the capacity to refine 210,000 barrels of oil a day, while other Ineos facilities on the site make plastics. But global demand for oil has fallen because people are travelling less during the Covid-19 lockdown, with analysts predicting an 11 per cent drop in 2020.
But environmental activists blame Ineos for making the climate emergency worse and contaminating oceans with plastic. “Ineos is the main driving force behind the establishment of an already existing supply chain of fracked US gas that Ineos uses to produce plastics in Europe,” says a joint letter from 105 campaigners.
“Humanity is currently being tested in manifold ways – with manmade global warming as the biggest and most comprehensive existential threat ever faced. The UK will host in Glasgow, a very crucial climate change conference – possibly paving the way for decades to come,” it adds.
“Bailouts or government loans for companies like Petroineos, who contribute systemically through their business model to climate change and an increasing plastic pollution of our environment and oceans, cannot be tolerated in these troubled times.”
The letter is addressed to the First Minister of Scotland, Nicola Sturgeon, the UK Prime Minister, Boris Johnson, and UK Chancellor, Rishi Sunak. The signatories include anti-fracking groups, campaigns against plastic pollution and climate activists in Scotland, the rest of the UK, Europe and the US.
“We call on you to side with the climate and the environment, prioritising long term stability for workers through green jobs, and we urge you not to bailout or to grant government loans to Petroineos,” it concludes.
Ineos has a ‘climate hostile business model’
The letter was co-ordinated by campaign group, Food & Water Action Europe. The hosts for the COP26 climate summit, delayed from November 2020 until 2021, “shouldn’t support a climate hostile business model that fuels the proliferation of fracking in Pennsylvania,” said the group’s policy advisor, Andy Gheorghiu.
Sarah Moyes from the environmental group, Friends of the Earth Scotland, said: “This must be planned for and managed in deep partnership with trade unions, workers and communities to ensure a just transition into clean industry that guarantees decent work for those impacted and secure local economies.”
Greenpeace UK argued that the oil industry must “re-orientate” towards meeting targets to cut climate pollution under the Paris agreement which came into force in 2016. “Any support packages for companies must set conditions to protect workers’ rights and high environmental standards, prevent public money from being diverted into the pockets of shareholders,” said the group’s Louise Edge.
Fashion designer, Vivienne Westwood, suggested that support for Ineos would fuel the climate and plastics crisis. “The Prime Minister of the UK and the First Minister of Scotland must prove true climate leadership by not granting any government support to Jim Ratcliffe and Ineos,” she said.
The Scottish Liberal Democrats have criticised Ratcliffe for avoiding hundreds of millions of pounds of British taxes. “We must not sanction a billionaire’s bail-out, while so many ordinary people struggle to get by,” said the party’s leader, Willie Rennie MSP.
“Billionaires should not be able to treat taxation as purely voluntary and then expect to benefit from support at the taxpayers’ expense.”
The Scottish Government stressed its commitment to its targets to cut climate pollution. “We are continuing to work with industry help them respond to the challenges of Covid-19 whilst furthering our decarbonisation goals as part of a just transition,” said a spokesperson.
“We are in regular contact with businesses and trade unions in sectors exposed to the economic challenges of Covid-19.”
The UK Treasury declined to comment, and Ineos has been asked to comment.
According to the Petroineos website, the Grangemouth refinery is responsible for four per cent of Scotland’s gross domestic product and eight per cent of its manufacturing base. “It is the primary supplier of aviation fuel for Scotland’s main airports, and a major supplier of petrol and diesel ground fuels across the central belt,” the company says.
“The refinery is a vitally important piece of infrastructure, its activities extend to both the local and wider economy, massively affecting the supply chain. In addition to the 550 people directly employed, the company brings in local contractors for large-scale operations.”
It adds: “Grangemouth plays a leading role in supplying Scotland’s fuel demand, and is of strategic importance to Scotland’s energy supply and regional economic development.”
The joint letter about Ineos from over 100 campaigners
OpenLetter NoBailoutForIneos (Text)
This story was updated at 15.10 hours on 28 May 2020 to include comments from the Scottish Government and the Scottish Liberal Democrats. Photo thanks to iStock/gsmudger.