Press release: 29 March 2021
€3bn Ineos plastics project in doubt as company drops inadequate permit
Petrochemicals giant Ineos has announced it is dropping its permit for the first stage of a planned plastics expansion in the Port of Antwerp, Belgium, following a court challenge launched last year by environmental law charity ClientEarth and 13 other NGOs.
The company has decided to pull its current permit for the clearance of woodland necessary for the expansion and prepare a new permit application.
This development is a major win for the lawyers and environmental groups who had taken action against Ineos’ ‘salami-slicing’ of the project into three separate permit applications. The groups won an injunction against ‘Project One’ in November, before submitting a full legal challenge against the Flemish authorities’ failure to assess the foreseen environmental impacts of the full project – a clear breach of EU and national laws.
It remains unclear whether Ineos’ future permit application will reflect the full environmental impacts of the project as the environmental groups have demanded it should.
ClientEarth lawyer Tatiana Luján said: “This project’s environmental impacts would be so far-reaching, we believe the authorities should not be able to authorise it. Beyond the clear local impacts of woodland destruction and plastic pellet leakage, we cannot forget that plastics are made from fossil fuels, and plants like this are a global climate issue.
“The magnitude of Project One’s impacts cannot be brushed under the carpet – or divided over several permits to make them look smaller. Winning permission step by step when each stage of the project is interlinked is an illegal approach. This permit was always inadequate and pulling it is the only legally correct course of action. Ineos must now go back to the drawing board.”
The decision comes following recent signs that Ineos may be backtracking on its plans for Project One. In January, Ineos announced it would indefinitely suspend plans for part of the expansion. Ineos reported this was due to market issues, with demand for propylene – a key ingredient of plastic – tanking. This sudden change of plans has already cost Ineos €118.5 million.
An additional concern may also be the increasing unprofitability of shale gas fracking in the US, a central element in the Ineos’ business plans, which has been under heavy pressure from climate protection legislation worldwide.
Mathieu Soete from Greenpeace Belgium said: “Ineos is increasingly on the back foot. Local protests against its plastics factory are surging, markets are losing interest, and its permit has been poked full of holes. We do not see how a new permit application could be successful, as on top of explaining its unjustifiable carbon and plastic pollution, it would also have to deal with the strengthened stance of the Flemish administration on nitrogen emissions.
“Instead of flogging a dead horse, Ineos should cut its losses and make way for a true transformation of the Antwerp harbour with respect for the climate, environment and workers’ rights.”
Koen Platevoet from Grootouders voor het Klimaat (Grandparents for the Climate) said: “As grandparents, we are worried about the impact this kind of project will have on our grandchildren’s future – its contribution to climate change risks making their lives harder.
“But we are also worried about what the project means for everyone living and working in the city today – it puts individual health and the environment in danger, but it also poses an immediate economic threat to citizens due to financial guarantees made by the Flemish government and several banks.
“That’s why we recently wrote to members of the Flemish Parliament, asking them to rethink this harmful project and for more transparency around its financial risk. Flemish taxpayers deserve to know how their money is being spent and how that contributes towards reaching Flanders’ and Belgium’s social and climate objectives.”
Ineos has said it plans to submit an amended environmental impact assessment in order to request a new permit from the Flemish authorities later this year. The project has already been delayed by over a year due to the environment groups’ legal action. Ineos’ decision to submit a new permit is expected to further delay Project One by at least two years.
Once published, the environmental groups will review the new permit and continue to take legal action where necessary to prevent Project One from causing irreversible damage to people and the planet.
ENDS
Notes to editors:
ClientEarth is working with the following organisations to stop the expansion of the Ineos plastics complex: Natuurbeschermingsvereniging De Steltkluut, Klimaatzaak, Greenpeace Belgium, StRaten Generaal, Fairfin, BOS+, Recycling Netwerk Benelux, Grootouders voor het Klimaat, Climaxi, Bond Beter Leefmilieu (BBL), WWF Belgium, Zero Waste Europe and Gallifrey Foundation.
The planned plastics installation – known as “Project One” – consists of two new plants: an ethane cracker, which converts ethane to ethylene, and a plant that converts propane to propylene. Ethylene and propylene are both raw materials for making plastics. In January, Ineos announced it would indefinitely suspend plans for part of the expansion. Ineos’ most recent Ineos Holding Group financial statements state that this cancellation has already cost Ineos €118,5 million.
Up to 167,000 tonnes of pre-production plastic pellets are estimated to leak into the environment in Europe every year, making pellets the second largest source of primary microplastic pollution.
Due to the scope and nature of Project One, banks and investors involved in the project require a form of financial guarantee to cover any potential risks that arise. In this case, it is believed that the Flemish government is providing a governmental guarantee of €250-500 million.
In October 2020, credit rating agency Moody's confirmed a negative outlook for Ineos.
In February Grootouders voor het Klimaat sent an open letter to members of the Flemish Parliament urging them to re-examine the decision to back Project One due to the lack of transparency around the financial flows to this project and guarantees promised by the government.
A recent ruling by the Council for Permit Disputes has created a significant legal precedent, which calls into question all future projects that emit nitrogen near protected areas. Particularly high concentrations are already present in Flemish soil, which threatens wildlife and habitats. This may have implications for Project One as it would be located next to several EU classified protected areas known as Natura 2000 sites.
Legal background
Environmental groups consider “Project One” both environmentally destructive and legally fraught. ClientEarth’s initial legal case, which delayed the project, was based on the Flemish authorities’ failure to fully assess the environmental impacts of the expansion – a clear breach of EU and national laws.
In December 2020, the environmental organisations submitted a judicial appeal against the approval of the permit for the woodland clearance needed for ‘Project One’. It came following an emergency injunction filed by the environmental groups in an urgent legal bid to prevent the felling of the forest. The approval of the injunction by the Council of Permit Disputes in Flanders, Belgium, meant Ineos is blocked from going ahead with the project until the court case is concluded.
In the judgment approving the NGOs’ emergency injunction, the Council for Permit Disputes stated that the environmental impact assessment, which forms the basis of Ineos’ deforestation permit, failed to sufficiently assess the full extent of the environmental and climate impacts the project will have as a whole, confirming the groups’ arguments.
Tatiana Luján is a Colombian-qualified lawyer.
About ClientEarth
ClientEarth is a charity that uses the law to create systemic change that protects the Earth for – and with – its inhabitants. We work on climate change and nature protection, with partners and citizens around the globe. We hold industry and governments to account, and defend everyone’s right to a healthy world. From our offices in Europe, Asia and the USA we shape, implement and enforce the law, to build a future for our planet in which people and nature can thrive together.
About Grootouders voor het Klimaat
Grootouders voor het Klimaat (Grandparents for Climate) is a civil society group which supports the climate youth movement. Established in 2019, Grootouders voor het Klimaat organises public actions and info sessions with the aim to increase awareness around climate change among their peers as well as provide them with a platform to make their voices heard.
About Greenpeace Belgium
Greenpeace Belgium is part of an international movement of people who are passionate about defending the natural world from destruction. Greenpeace stands for environmental justice, as its vision of a greener, healthier and more peaceful planet can only be realised when we jointly act on the interlinked social and ecological crises we face today.