Industry

Ineos drops permit for work on Antwerp chemical facility

Ineos has withdrawn its environmental permit for the first phase of a controversial, multi-billion chemical complex in the port of Antwerp.

Occupation of Ineos Project One land at Antwerp Port, 3 October 2020. Photo: Ineos will fall

The decision comes after legal action by environmental organisations and opposition from a dozen UK anti-fracking groups.

In November 2020, lawyers for ClientEarth and 13 other organisations successfully secured an emergency injunction to prevent the clearance of woodland for Project One, a E3 billion ethane cracker and propane dehydrogenation (PDH) plant.

If approved, Project One was expected to use fracked ethane from the US to make base materials for plastics. Work had been due to begin in mid-2021, with construction scheduled for later in the year.

Ineos, the UK’s largest shale gas licence holder, has now said it will submit a new permit application with an amended environmental impact assessment later this year.

ClientEarth described the decision as a “major win”. Its lawyer, Tatiana Lujan, 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.”

ClientEarth said it would review the new permit when published and “continue legal action where necessary to prevent Project One from causing irreversible damage to people and the planet.”

Ineos’s decision followed indications that the company had scaled back Project One.

In January 2021, it announced it had suspended the start of the PDH plant, which would turn propane into polymer-grade propylene.

The Ineos 2020 annual report, published earlier this month, said:

“Following a strategic review in 2020, INEOS has determined that the need for propylene in the quantities previously envisaged was less urgent. As a result, Project ONE was rescoped to only consist of an ethane steam cracker with a nameplate capacity of approximately 1,450 kta and associated utilities, tankage and infrastructure. Additional propylene capacity will be the subject of a separate future project.”

The annual report said Project One remained the largest investment in the European chemical industry for 20 years but it warned:

“there can be no assurance that the project will be completed or that it would be completed at the anticipated cost or within the indicated timeframe. We may not be able to successfully implement our strategic and operational initiatives for Project ONE, and an inability to realize the full extent of anticipated benefits could have a material adverse effect on our business, financial condition and results of operations.”

On the permit suspension, a company spokesperson told the Belgian media:

“It is therefore perfectly logical that we renounce the implementation of the environmental permit. After all, the scope has been reduced to the construction of the ethane cracker and supporting infrastructure.”

The spokesperson said a new environmental impact assessment and environmental permit application for the ethane cracker would account for cumulative environmental impacts. This had been part of the legal case against the renounced permit.

4 replies »

  1. Ineos, the UK’s largest shale gas licence holder, has now said it will submit a new permit application with an amended environmental impact assessment later this year.

    Yep, they are going to submit a new permit application!

  2. Exactly, E-G.

    Anyone would think the current pandemic is not adjusting most business expansion plans. (In most cases delaying, and/or reducing, in a few-such as on line businesses and pharma- accelerating and/or expanding.)

    But, ClientEarth obviously not wanting a pandemic to go to waste. They join a growing list but I find few who do not see through to the reality.

  3. Perhaps the effects of the pandemic and the successful completion of purchasing BP’s global chemical division in January, has led to Ineos re-evaluating its business model and expansion plans?

  4. Indeed, John.

    Having worked for a number of international companies, I have yet to see any of those who did not look at planned developments as and when they acquired new businesses. Add a pandemic on top of that and the result is predictable.

    I expect there will be many more examples over the next couple of years as the pandemic comes under control and businesses that have become vulnerable are taken over.

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