INEOS Halts Production at Key European Chemicals Plants

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Blaming high energy costs and oversupply INEOS Group (London) has halted production of propylene oxide (PO) and propylene glycol (PG) production in Germany and mothballed its chloromethane facility in Tavaux, France.

INEOS Oxide (Rolle, Switzerland), one of Europe's leading producers of ethylene- and propylene-based chemicals and part of INEOS Group, notified partners that its massive Koeln petrochemical site in Cologne will cease production of PO and PG with immediate effect. The site has the capacity to produce 210,000 tonnes per year of PO and 120,000 tonnes per year of PG. "The high costs of raw materials, gas, energy, combined with the oversupply in the propylene oxide market and low local demand for derivatives have placed Europe at a significant disadvantage compared to other regions," the letter, seen by ICIS. "Additionally, the competitive disadvantage of the chlorohydrin process for manufacturing propylene oxide, compared to more efficient processes, has further contributed to our inability to justify the continuity of production." Industrial Info is tracking 81 INEOS projects in Europe worth more than US$6.7 billion. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for the reports.

The news comes in the same month that INEOS Inovyn has mothballed its chloromethane production facility in Tavaux, France. At the same time it will be "optimizing its chloromethane production at Rosignano in Italy, to mitigate any impact to customers." Arnaud Valenduc, INEOS Inovyn's business director, said: "Our industry continues to face difficult market dynamics and challenging energy costs, with European gas prices around three times higher than the U.S.. To balance INEOS Inovyn's operating rates with weak market demand, we have announced the decision to mothball our chloromethane production facility in Tavaux. We remain committed to supporting our customers."

INEOS has been having a turbulent 2025, and earlier this month, the company had its credit rating cut by Fitch, the ratings agency, for the second time in the past two years. The rating cut was attributed to weakness in the global chemicals sector and concerns about the company's rising debt levels. The company has been particularly vocal about its dissatisfaction with the U.K. government's support for the sector. In August, Industrial Info reported that INEOS Olens and Polymers (INEOS O&P) had warned that the U.K.'s largest chemicals plant at Grangemouth, Scotland, was facing the risk of closure due to surging energy costs and carbon taxes. Stuart Collings, chief executive officer of INEOS O&P, told The Telegraph newspaper. "INEOS has had to effectively subsidize the Grangemouth business from profits it makes on other businesses around the world, and has done that for a number of years. That's the only way we've been able to survive." For additional information, see August 18, 2025, article - Risk of Closure for U.K.'s Largest Chemicals Site.

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