Press release: 15 January 2021
Ineos cuts major plastics investment in wake of court action, reports say
Petrochemicals giant Ineos has suspended plans indefinitely for a major new plastics unit in the Port of Antwerp, according to reports in the Belgian media.
The news comes after lawyers at environment charity ClientEarth, together with 13 NGOs, won an injunction against the project in November, pending the outcome of an ongoing court case over the under-investigated environmental impacts of two planned units. The case highlighted the unsolved plastic pellet crisis affecting Antwerp’s shoreline and nature reserves, as well as the intense climate impacts of using shale gas to manufacture plastics.
The suspended propylene dehydrogenation (PDH) unit was set to comprise one of two installations in the €3bn investment “Project One”, which was set to be Ineos’s biggest ever. Together with an ethane cracker, the units were set to manufacture the key ingredients of plastic, propylene and ethylene.
Ineos is reporting that the change of plan is down to market issues, with demand for propylene tanking. Credit rating agency Moody's had already confirmed a negative outlook for Ineos in October.
The move should raise serious questions for investors.
ClientEarth lawyer Tatiana Luján said: “Antwerp has been suffering a major plastic pollution problem and adding further production capacity to Ineos’s existing facilities was only going to intensify it, as well as making it exponentially harder to meet climate targets.
“The news of the suspension of this unit is a relief for anyone concerned about the plastics and climate crises, but it’s also overdue. The sheer breadth of the environmental implications of this project mean that it should have been a no-go from the planning stages. We will continue to fight to overturn approval for Project One.”
The surprise announcement also reportedly means the immediate disbanding of the project team, with job losses likely to result.
Luján said: "We regret that the project was allowed to advance this far as this U-turn could now mean job losses. The world is changing, policy by policy, and carbon-intensive industries are going to find it harder and harder to stay afloat. With plans for the PDH unit now on ice, there is serious doubt over whether it will ever be built.
“It's been well known throughout Ineos's planning process that plastics oversupply is a market-wide issue – the fossil fuels industry is volatile and vulnerable and these risks are clear.”
The lawyers will continue their fight against Project One, due to the need for the environmental impacts of the ethane cracker to be interrogated in court.
Notes to editors:
While climate risk is now under constant discussion within the ‘traditional’ fossil fuel industry, plastics executives are all too often unaware of the risks closing in on the petrochemicals sector, including increased regulation around plastic, waste and carbon emissions. ClientEarth authored a report, “Risk unwrapped”, in 2018, to demystify the issue.
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 Network Benelux, Grootouders voor het Klimaat, Climaxi, Bond Beter Leefmilieu (BBL), WWF Belgium, Zero Waste Europe and Gallifrey Foundation.
The 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 means Ineos is blocked from going ahead with the project until the court case is concluded.
Tatiana Luján is a Colombian qualified lawyer.
ClientEarth is a charity that uses the power of the law to protect people and the planet. We are international lawyers finding practical solutions for the world’s biggest environmental challenges. We are fighting climate change, protecting oceans and wildlife, making forest governance stronger, greening energy, making business more responsible and pushing for government transparency. We believe the law is a tool for positive change. From our offices in London, Brussels, Warsaw, Berlin and Beijing, we work on laws throughout their lifetime, from the earliest stages to implementation. And when those laws are broken, we go to court to enforce them.