Chemicals are the backbone of modern life— think toothpaste, fuel, and home insulation. But nearly all these products come from fossil fuels, with production that’s heavy on emissions. Despite this, the chemicals sector has been largely ignored in national climate talks. Now, with decarbonisation investments heading overseas, the industry is quietly eroding, along with thousands of good jobs.
To prevent this and secure jobs for both current and future generations, we must invest in renewable raw materials and focus on upgrading and decarbonising our chemical plants. We have already lost hundreds if not thousands of jobs since 2020, with chemicals plants shutting down and shrinking operations. These were quality, family-sustaining jobs. In regions where there are high levels of unemployment and poverty, chemical plants pay higher than average wages.
In recent years, the UK has seen numerous chemical plant closures. In many cases, the same company that shutters a site in the UK is simultaneously investing in Europe or the USA. Chemicals companies are building or upgrading facilities that address the challenges of the future, by reducing energy demand, cutting carbon emissions or producing new zero carbon raw material. Unfortunately, this type of future proofing investment rarely goes to the UK.
The chemicals industry is changing. Like automotive and steel today, there will be a race to make the climate-compatible chemicals of the future. Over the next two decades, there will be increased importance for sustainable feedstocks, which both decarbonise the industry itself, and beneficially impact the value chain. Methanol and ammonia are anticipated to be crucial chemicals for the net zero transition, with their demand forecast to grow 4-5 times to satisfy demand for green shipping, hydrogen, and other derivatives. 9 This demand will be for low or net zero carbon materials. The UK does not currently manufacture methanol, and recently closed an ammonia site. We have no green methanol or green ammonia plants.
Whilst the UK has announced several schemes, including large-scale green hydrogen production, currently, these remain at an early stage (when they have started at all). The chemicals industry can be the source of high levels of high-quality employment in the future, but without investment, support, and worker voice, the risk is further decline, reliance on imports for basic chemicals, and we will miss out on opportunities for growth and sustainable jobs.
New Sustainable Chemicals and Materials Manufacturing Research Hub
The University of Oxford is leading a major UK government investment in research to improve the sustainability of chemical and polymer production. The Sustainable Chemicals and Materials Manufacturing Hub (SCHEMA) will bring together researchers from across the UK working with a large consortium of commercial, technology translation and civic partners. The Hub has been funded by £11 million from the UKRI Engineering and Physical Sciences Research Council (EPSRC) and leverages a further £22 million in funding from its partners.
SCHEMA is one of five new manufacturing research hubs announced today by UKRI EPSRC which aim to address a wide range of challenges in commercialising early-stage research within different manufacturing sectors.
Science Minister, Andrew Griffith said: ‘Manufacturing accounts for almost a tenth of the UK’s economic output, but for the sector to keep growing and sustaining jobs nationwide, it has to tackle challenges ranging from reducing emissions, to cutting production costs. These new hubs will support UK researchers with the cutting-edge facilities they need, to help our manufacturers seize the benefits of technologies such as robotics and AI. Harnessing these innovations will cement the UK’s position as a global leader in sustainable manufacturing.’
The SCHEMA Hub will be led by Professor Charlotte Williams OBE FRS from the University of Oxford’s Department of Chemistry and will involve academics from the departments of Chemistry, Engineering, Materials Science, Computation, Environmental Economics, and Law at the Universities of Oxford, Bath, Liverpool, Cardiff, York, and Cambridge.
Professor Williams said: ‘It is imperative that the chemical industry reaches net zero emissions and sustainability as so many essential downstream industries depend upon it. Our Hub will be well placed to tackle this difficult challenge by bringing together a very wide range of academic expertise with companies from across the supply chain.’
The research focuses on transforming the way chemicals and polymers are designed, made, and recycled. This includes supporting the transition away from the use of virgin petrochemicals and redesigning processes and materials to increase recycling rates. A key focus will be to design processes that can produce chemicals and polymers from renewable raw materials such as biomass, carbon dioxide, and even industrial wastes, and integrating renewable energy into the process engineering. This will build upon the University of Oxford’s research on transforming carbon dioxide and biomass wastes into plastics, elastics, adhesives, and coatings.
Chemical manufacturing is crucial to the UK’s economy. It is the UK’s second largest manufacturing industry, directly employing over 140,000 people and delivering turnover exceeding £75 bn/yr. However, there is an urgent need for this industry to tackle the environmental impact from both manufacturing and its products. Greenhouse gas emissions from the global sector are significant, with it currently accounting for approximately 5–6% of emissions, which is 2–3 times larger than the global airline industry. Coupled to this are the challenges of raw material being sourced from fossil fuel extraction and refining, pollution in water and soil, and globally low rates of polymer recycling.
The academics working in SCHEMA have strong track records in commercial partnership and entrepreneurship. For example, Hub EDI champion Professor Kylie Vincent is a founder of HydRegen, which applies innovative chemo-enzymatic processes to make chemicals. The Hub is strongly integrated with high-tech and growth SMEs as well as multinationals. It builds upon the successful partnerships established in the Oxford and Bath-led Innovation Centre for Applied Sustainable Technologies.
University of York
The University of York has partnered with renewable chemicals company, Circa Group, to launch the Circa Renewable Chemistry Institute (CRCI). The new Institute aims to produce and promote bio-based products that are safer and more sustainable for the chemical industry. The partnership also means that students will be able to work on real-world projects in renewable chemistry to support their future careers in the industry.
Professor James Clark, Director of the CRCI at the University of York, said: “We have worked with Circa now for nearly a decade, and the strength of the relationship lies in the shared belief that the chemical industry can and will be environmentally responsible and able to transition from fossil-based chemicals to commercially viable bio-based products. We have seen the impact that Cyrene™ has had on the industry, and this is now our inspiration to continue to work on other green products that can be scaled-up to meet the demands of consumers without damaging our environment.”
As part of the partnership, Circa and its key customers will have access to all of the latest research from the University’s Green Chemistry Centre of Excellence (GCCE), as well as the use of laboratories, equipped with the latest technologies. In addition to developing commercial applications for Cyrene™, the team will be looking for the next breakthrough in renewable chemistry.
Nick Smith, Head of Development and Commercialisation for Circa, said: “This partnership provides the skills and expertise of both the Green Chemistry Centre of Excellence and the Bio renewables Development Centre to support application and process development with market leaders who are moving their manufacturing processes to safer and more sustainable products, such as Cyrene™.”
Scottish Biorefinery
The first tanker of sustainably produced bioacetone and biobutanol has been dispatched from Celtic Renewables’ flagship biorefinery in Grangemouth – marking a major milestone for the world’s shift to green chemicals. This achievement is backed by over £60 million (€71 million) in funding which enabled the construction of Scotland’s first biorefinery and its commercial-scale operations. The cargo containing bioacetone and biobutanol is on its way to a processing plant in Chesterfield as part of a long-term deal with internationally renowned chemical distribution company, Caldic.
Mark Simmers, CEO of Celtic Renewables, said: “Our plant is the first of its kind, turning our ideas and aspirations into reality. As the world’s first biorefinery to produce and supply green chemicals at this scale, we are proud to lead the way in the green chemical revolution.
“From an idea that started out in the lab, our fermentation is now at a scale of 100,000 litres for each batch that we run through – a process that has been born, developed and proven in Scotland where our global technology centre is based.
“We are already looking into three to four larger scale biorefinery opportunities which we are aiming to develop in the next four to five years, with a combined output of 32,000 tonnes per annum. We are seeking to deploy our tech through licensing and partnerships across the globe.
“The chemical industry relies heavily on fossil fuels, but we know the demand for green chemicals is incredibly strong. Our bioacetone and biobutanol can reduce the chemical industry’s carbon emissions, and our technology has the potential to dramatically reduce the environmental footprint of everyday consumer products. We now have the tools and commercial capability to displace the chemicals made from gas and oil in the manufacturing process.”
Bettina Brierley, Product Group Leader Caldic UK, says: “Celtic Renewables’ green chemicals directly improves our customers’ ESG ratings. They represent true circularity and will support our customers in reaching net zero by 2050.
“Our customers have been waiting for a solution like this for a long time. Demand for bioacetone and biobutanol is high, and therefore manufacturers are ready to shift away from fossil fuels. Our customers are driven by net zero targets and the desire to make cleaner and greener products. We have not seen such a significant carbon footprint reduction in any mainstream chemical before.
“With years of research and testing behind them, Celtic Renewables has developed high-quality green chemicals that can displace their petrochemical equivalents. This facility is at the forefront of green chemical production, and we are delighted to be able to support our clients in creating a more sustainable production model that is kinder to the planet.”
Government support necessary
A new report published by Energy Futures Lab, Imperial’s global energy institute, finds that the UK’s offshore wind resources make it ideally placed to produce hydrogen from renewable electricity, with the potential to export significant quantities to its European neighbours.
The Briefing Paper, ‘Enabling the UK to become the Saudi Arabia of Wind? The cost of green hydrogen from offshore wind’, argues that green hydrogen will be necessary to decarbonise sectors of the economy that cannot be electrified, but warns that Government support will be needed to bring down costs in the short to medium term.
“Thanks to our long coastline and windy seas, the UK is probably the most suitable place in Europe to generate wind power,” says Dr Olusola Bamisile, first author of the report. “Using that power to produce hydrogen means we can store surplus energy for later use and give industry a clean alternative to fossil fuels at the same time.”
At present, most hydrogen is produced using natural gas as a feedstock, which results in the release of greenhouse gas emissions. ‘Green hydrogen’, on the other hand, is produced through electrolysis – where water is split using an electrical current from a renewable source – a method which, while more environmental beneficial, is currently two to three times more expensive.
“Hydrogen is a fundamental building block for a range of chemicals essential to our society”, says Luke Hatton, co-author of the report. “Green hydrogen holds promise to decarbonise existing production, whilst also potentially acting as a clean fuel for many other sectors. An understanding of the costs and associated barriers to green hydrogen is vital to determine its role in achieving net zero.”
Although production costs are expected to fall over the coming decade, the authors note that, without intervention, green hydrogen is likely to suffer from a ‘chicken and egg’ scenario, where demand is inhibited by cost and vice versa.
The authors say political will is needed to advance green hydrogen production in the near term and see it through a critical cost reduction phase, with policy support needed to build markets for its end use and areas where it creates the most value for the British public. This could create a safe investment environment for backers of early projects to build momentum and guarantee future cost reductions. “It is almost impossible to imagine a future where hydrogen will not play some major role in the decarbonisation of our economy. For some sectors there is currently no viable alternative but, at the moment, the cost of hydrogen is a major barrier,” says Dr Malte Jansen from the University of Sussex, who co-led the study with Imperial’s Dr Iain Staffell. “Electrolysers are still expensive, which is why we need the Government to step in to help scale up the technology to ultimately reduce the cost.”
