European Chemical Industry Faces Crisis Amid Surge in Plant Closures

The European chemical industry is experiencing a significant crisis, marked by a sixfold increase in chemical plant closures since 2022. According to the European Chemical Closures & Investments Radar 2022–2025, published by Roland Berger for Cefic, the industry has lost 37 million tonnes of production capacity, which equates to approximately 9% of the continent's total output. This alarming trend has resulted in the elimination of 20,000 direct jobs, with an additional 89,000 indirect jobs at risk, underscoring the sector's vital role in regional supply chains.

Europe’s Chemical Sector Under StressEuropean chemical industry faces crisis as plant closures surge, investments stall

The primary driver of these closures is a lack of energy cost competitiveness, which has been exacerbated by low demand (19%), overcapacity (9%), and regulatory challenges (8%). The petrochemical segment is particularly affected, accounting for 48% of the total announced closures, with nine steam crackers among those slated for shutdown. Germany and the Netherlands are the most impacted countries, collectively representing about 45% of the announced capacity reductions.

Europe’s Chemical Sector Under Stress

Investment in new chemical capacity has sharply declined, with annual announced investment capacity plummeting from 2.7 million tonnes in 2022 to just 0.3 million tonnes year-to-date in 2025. This decline reflects a broader shift away from diverse innovation pathways—such as electrification, hydrogen feedstocks, and circular plastics—toward a minimal number of pilot initiatives. The total investment over the four-year period from 2022 to 2025 is projected to be around 7 million tonnes, indicating a stark contraction in the sector.

European chemical industry faces crisis as plant closures surge, investments stall

The rapid rate of plant closures and the stagnation of new investments raise serious concerns about the long-term viability and competitiveness of the European chemical industry. Analysts have warned that without urgent and decisive action, the sector could face further erosion of its industrial base, leading to increased uncertainty and potential economic repercussions across Europe.

European chemical industry faces crisis as plant closures surge, investments stall

The report emphasizes the urgency of the situation, stating, “It’s no longer a question of being five minutes before or after twelve. The sector is under severe stress and breaking.” It calls for immediate intervention to mitigate the crisis and stabilize the industry at the factory floor level.

European chemical industry faces crisis as plant closures surge, investments stall

Critics of the current situation argue that the lack of proactive measures from both industry leaders and policymakers has contributed to the crisis. They highlight the need for a coordinated response to address the challenges facing the sector, particularly in terms of energy costs and regulatory frameworks.

European chemical industry faces crisis as plant closures surge, investments stall

While the report provides a comprehensive overview of the closures and investment decline, it does not specify the exact regulatory changes contributing to the industry's challenges. Additionally, there is a lack of detailed information regarding potential government interventions or support measures being considered to address the crisis.

European chemical industry faces crisis as plant closures surge, investments stall

• “It’s no longer a question of being five minutes before or after twelve. The sector is under severe stress and breaking. The rate of closures has doubled in a year, and even worse, annual investments are half and close to zero. On both sides, the speed is accelerating, not slowing. We need decisive action this year, with impact at factory floor level,” — Roland Berger, Analyst

European chemical industry faces crisis as plant closures surge, investments stall

• “We need decisive action this year, with impact at factory floor level,” the report states.” — Roland Berger, Analyst

European chemical industry faces crisis as plant closures surge, investments stall

The European chemical industry stands at a critical juncture, with the potential for significant long-term impacts on its competitiveness and employment landscape if the current trends continue unchecked.

Europe’s Chemical Sector Under Stress