The UK government's plans for a £350 million Critical Chemicals Resilience Fund to support "strategically important" producers and sites and strengthen critical supply chains has been welcomed, but it needs to be paired with a longer-term, more ambitious strategy that reflects the scale and importance of the sector to the UK economy.
Speaking on BBC Radio's Wake Up to Money, SCI's CEO Sharon Todd said that: “Whilst this £350 million is very welcome. I think it is important to note the scale of investment that we really need to build back is probably ten times that.”
Setting out the challenges that need to be tackled Todd said that the new investment had come on the back of a significant decline in manufacturing capabilities in the UK over the last 10 years, and the decline has been accelerating.
“This has meant that we have lost core capabilities to make critical things in the UK. What that’s done is left us very exposed to supply chain shocks. And obviously with the Iran situation that we now have, the UK is suffering from significant supply chain shocks,” Todd said.
Highlighting the importance of one of many important chemicals, ammonia, Todd added: “Ammonia is critical in the manufacture of fertiliser, it’s basically used to feed the global population. Twenty five percent of that ammonia supply comes through the Strait of Hormuz.
"That product [ammonia] relies on gas as a feedstock, not as an energy source. In 2025 we shut down the last manufacturing plant because of high costs in the UK. This isn’t a market issue. This is a UK specific issue.”
During November 2025 a new report from the SCI and the National Preparedness Commission (NPC) assessed the impact of future crises on UK industry, revealing a startling vulnerability and lack of resilience.
The government said the £350 million fund, which will be developed in partnership with industry and independent experts will back the UK’s most strategically important chemical producers "the firms that supply the critical inputs relied on by sectors including food, energy, water and healthcare.” The fund is aimed at keeping the sites of the key producers in these areas competitive and strengthening supply chain resilience.
Welcoming this development SCI said that the funding reflects the recognition of the sector’s vital role in economic resilience, supply chain security, and industrial capability. However, SCI has cautioned that while the package is a positive signal of intent, much greater investment, as well as policy change, will be needed to build back the capabilities that the UK needs.
The government has said that the work to deliver the Critical Chemicals Resilience Fund is expected to start this summer with funding made available over a “multi-year period.”
The government said it will continue to work hand-in-hand with industry "to ensure broader policy delivers decarbonisation and not deindustrialisation". It added "We are committed to tackling unfair foreign trade practices, and Ministers will urgently convene the chemicals industry to explore potential trade defence action."
Further reading:
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- Green hydrogen-based fertiliser project gets new funding
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