Market Scenario Europe’s Chemical Industry in Crisis

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Europe’s chemical industry is sliding into crisis as rising energy costs, weak demand, and dwindling investments force widespread plant shutdowns. Without swift policy intervention, the region risks losing its industrial backbone to competitors in lower cost, faster growing markets.

Escalating production expenses, surging energy costs, subdued demand, and waning investments leave no doubt – the European chemical industry is in a crisis. The most evident sign of this is the multiple chemical plant shutdowns in the region since 2022. Cefic’s latest ‘European Chemical Closures & Investments Radar 2022-2025’ report, commissioned by the European Chemical Industry Council (Cefic) and prepared by international management consulting firm Ronald Berger, has revealed that chemical plant closures in Europe, surged sixfold since 2022, reaching a cumulative 37 Mt of capacity – or around 9 % of European production capacity.

“The surge in chemical plant closures across Europe reflects mounting pressure on the industry’s competitiveness,” shares Marco Mensink, Director General of Cefic (European Chemical Industry Council) in an exclusive interview with PROCESS Worldwide. “According to Cefic’s latest Chemical Trends Report, EU chemical capacity utilization has remained around 74–75 %, well below long term averages and consistently lower than in competing regions since 2022. At the same time, European gas prices have remained around 2.5 to 3 times higher than in the United States throughout 2024–2025, significantly weakening the cost position of energy intensive chemical production.”