The Chemical Industries Association (CIA) is the leading national trade organization representing and advising over 200 chemical and pharmaceutical members in the United Kingdom. In an atmosphere of untenable global competition and rising energy costs, the Association is pushing for more agile governmental support for the chemical manufacturing sector.
What does the United Kingdom’s resilience fund represent for the industry?
Our industry has been struggling with policy costs and regulatory demands alongside more competitive landscapes in other parts of the world. During the COVID crisis, the industry almost came into its own and we thought governments then understood why the industry is so critical. Instead, the U.K.’s chemical output fell by 660% between 2021 and 2025. We wrote to the Prime Minister for help after around 25 site closures, largely driven by energy and carbon costs. The £350 million Critical Chemical Resilience Fund is a first step toward moving from language to action in our government's industrial strategy. I think this program will be oversubscribed at the outset–we initially requested £1 billion-plus because the support would benefit entire supply chains. I would prefer for most of the funding to support operational rather than capital expenditure so we can get our knees off the ground and start to compete again before taking on projects and government partnerships.
How has the U.K.’s chemical industry navigated energy costs and competitiveness challenges?
Energy can account for more than half of the chemical industry’s costs and remains the biggest constraint to competitiveness. At times, U.K. power and gas prices have been five times higher than in the U.S. and higher than many European competitors. The low-hanging fruit has been exhausted, so we have supported policy cost reductions on electricity bills. A power supercharger scheme provides relief to certain energy-intensive businesses for network charges and upgrades for electrification. The British industrial competitiveness plan will reduce power bills by 25% for companies in strategic growth sectors and companies serving these sectors, over half of which are relevant to chemistry. By the end of this government’s term in 2029, however, the alleviation will be outweighed by increased policy costs. We are asking for more alleviation and a request to lift the moratorium on North Sea gas and oil.
How important is domestic chemical production to the U.K.’s resilience?
The economy needs a sound manufacturing base and secure chemical underpinnings. Unfortunately, the U.K. has had a very laissez-faire approach, which is just free and fair trade in good times. But over recent years, people's versions of trade have become more protectionist and other countries are growing faster than us. We had three petrochemical crackers in the U.K. in 2021–two have closed in the past year. We have also lost, or have very limited remaining production of, chemical building blocks such as ammonia, ethanol, methanol, ethylene oxide, sulfuric acid, methyl methacrylate and acrylonitrile essential for clean energy, defense, advanced manufacturing and life sciences.
What safety initiatives are in place across the UK chemical industry?
Responsible Care is an obligatory condition of membership for U.K. companies joining the Chemical Industries Association whereas in other countries, it is voluntary. We are updating our principles and requiring senior executives to sign them. We operate Responsible Care cells across the country that bring together industry practitioners, regulators and environmental agencies from England, Scotland and Wales to openly discuss health, safety and environmental performance. Many of the companies also operate under the U.K.’s Control of Major Accident Hazards regulations.
When economic pressures increase, there is a danger that attention gets diverted toward self-preservation. Companies want to do the right thing but must do this as cost-efficiently as possible. And in difficult times, the government restricts discretionary spending. Our record safety record has increasingly improved around our physical asset performance and responsibilities but it is becoming more challenging for the chemical sector to reassure customers and end consumers about how safe its products are. You see this in the debate over PFAS chemicals.
What partnerships and networks are important to the Chemical Industries Association?
We remain closely connected through organizations such as The European Chemical Industry Council and the International Council of Chemical Associations. India just joined the ICCA and China will soon. Australasia, Japan, South Korea, South America and Mexico have been there for years. We still need a bedrock of U.K.-based capability within the multinational landscape. It does not necessarily need to be U.K.-owned. Foreign investment in U.K. chemical clusters is positive and overseas ownership could make the aftermath of difficult plant closures easier.
What strengths does the U.K.’s chemical industry have to carry itself into the future?
The U.K.’s chemical industries remain a major contributor to the economy, generating around £60 billion in turnover and employing more than 100,000 people, often in quite economically challenged areas. These opportunities bring highly skilled, well-paid roles that support local communities. Our academic collaborations are almost second to none, but where we fail badly is in scaleup and commercialization due to low funding and the overall policy landscape. The cost-growth axes make it unattractive to scale up here in the U.K.
This is not a comment supporting or decrying Brexit, but there is frustration that we could have and still can move far more swiftly after leaving the European Union but have not done so. Our carbon reduction is happening more through deindustrialisation rather than positive intent, so why not sort out policies to make innovations such as carbon capture and storage technology and hydrogen viable? Unfortunately, we are probably still in the higher-cost, lower-growth doomsday vector. In the opposite corner, higher-growth and lower-cost is a rising tide lifting most boats.
All is not lost–if energy, carbon and regulatory pressures are addressed, I believe we can stay afloat.
