Europe's Chemical Industry Loses 37 Million Tons of Production Capacity in Four Years, High Energy Costs Identified as Main Cause

A report released by the European Chemical Industry Council (Cefic) reveals that since 2022, the scale of chemical plant shutdowns in Europe has surged sixfold, with a cumulative loss of 37 million tons of capacity over four years, accounting for approximately 9% of Europe's total chemical production capacity. This has directly resulted in 20,000 job losses in the industry. Meanwhile, new investments in the sector have significantly shrunk, and concerns about the competitiveness and long-term viability of Europe's chemical industry continue to intensify.

Marco Mensink, Director General of Cefic, issued a warning: "The European chemical industry is under immense pressure and is on the verge of collapse. The rate of plant closures has doubled in just one year, and even more alarming, annual investment has been halved, nearly dropping to zero. The situation facing Europe's chemical industry is not improving; instead, it is becoming increasingly severe. Decisive action must be taken this year, and measures need to directly impact production at the plant level."

Data shows that announced capacity shutdowns in the European chemical industry from 2022 to 2025 have exploded, with shutdowns reaching 2.9 million tons in 2022, increasing to 8.7 million tons in 2023, 8 million tons in 2024, and surging to 17.2 million tons in 2025, resulting in a cumulative shutdown of 37 million tons over four years.

From a sectoral perspective, the upstream petrochemical industry has been hit the hardest, with a 14% reduction in capacity, totaling 17.8 million tons of shutdowns, accounting for 48% of the total shutdowns. The basic inorganic chemicals sector followed, with 11.7 million tons of shutdowns, representing 32%; the polymer industry saw 5.4 million tons of shutdowns, accounting for 15%; and the specialty chemicals sector experienced 2 million tons of shutdowns, making up 5%.

Geographically, the wave of capacity shutdowns has swept across Europe, with Germany being the most severely affected, shutting down 8.8 million tons of capacity, accounting for 25% of the total shutdowns. The Netherlands ranked second with 7.2 million tons of shutdowns, representing 20%; the UK, France, Italy, Belgium, and Spain followed with shutdowns of 4.5 million, 3.9 million, 2.5 million, 2.3 million, and 1.6 million tons, accounting for 12%, 10%, 7%, 6%, and 4%, respectively. The remaining European countries collectively shut down 6 million tons, representing 16%. Among the reasons given by companies for the shutdowns, uncompetitive energy costs accounted for 50%, while weak demand, overcapacity, and tightening regulations contributed 19%, 9%, and 8%, respectively.

The report emphasizes that this wave of capacity shutdowns has significantly impacted Europe's economy and society. In addition to the loss of 20,000 direct jobs, approximately 89,000 indirect jobs across Europe are at risk. Compounding the issue, new investments and capital expenditures in the European chemical industry have plummeted. Annual investment scale dropped sharply from 2.7 million tons in 2022 to 0.3 million tons in 2025, with a total investment of only about 7 million tons over the four years. Confirmed total capital expenditures fell by 81%, from €7.6 billion in 2022 to €1.5 billion in 2025. The direction of investment has also shifted significantly, with previously substantial investments in innovation areas such as electrification, hydrogen feedstocks, and circular plastics now reduced to only a few pilot projects.

The report warns that as the pace of plant closures far exceeds the implementation of new investment projects, Europe's chemical industry is陷入持续萎缩的困境. This trend further exacerbates uncertainty in the industry's development and raises deep doubts about Europe's ability to maintain a competitive and resilient industrial base.