Europe's Chemical Sector in Crisis: Closures Outpace Investments, Threatening Industrial Base

Europe's chemical sector is under severe stress, with plant closures increasing sixfold since 2022, leading to a loss of 37 million tons of capacity and 20,000 direct jobs. A report by Roland Berger and CEFIC reveals a sharp slowdown in new investments, totaling only 7 million tons over 2022-2025, contrasting sharply with the closures. This trend, driven primarily by high energy costs, signals a significant contraction and raises concerns about the continent's industrial competitiveness.

Europe’s chemical sector is facing a deepening crisis, marked by a sixfold increase in plant closures since 2022, resulting in a staggering loss of 37 million tons of production capacity—approximately 9% of the continent's output—and 20,000 direct jobs. An additional 89,000 indirect jobs are at risk due to the industry's crucial role in European value chains. This alarming trend is highlighted in the 'European Chemical Closures & Investments Radar 2022–2025' study, commissioned by the European Chemical Industry Council (CEFIC) and conducted by Roland Berger.The report also details a severe deceleration in new investments, with annual announced capacity plummeting from 2.7 million tons in 2022 to just 300,000 tons in 2025, summing to only 7 million tons over the entire period. This investment decline reflects a shift away from broad innovation pathways. Marco Mensink, CEFIC’s Director General, warns that the sector is 'breaking,' emphasizing the accelerating pace of closures and the near-zero annual investments. Energy cost competitiveness is cited as the primary reason for 49% of closures, followed by demand-related considerations. The net effect over 2022-2025 is a projected capacity reduction of 30.2 million tons, with significant imbalances observed geographically, particularly in Germany and the Netherlands, and segmentally, impacting upstream petrochemicals and basic inorganics more severely than specialty chemicals.