The first half of 2025 has been described as “disappointing” for the EU chemical industry, according to the latest Chemical Trends Report Q2 by CEFIC, based on Eurostat data. The sector, which employs more than 1 million people, now faces an EU chemical industry crisis in 2025 that threatens its long-term survival.
Energy Prices Driving the EU Chemical Industry Crisis
Industry experts from the Society of Chemical Industry (SCI) and Independent Commodity Intelligence Services (ICIS) point to weak demand, uncompetitive energy costs, and risks from global trade disputes, including U.S. tariffs. After a modest 2.4% growth in 2024, production in the EU27 is expected to decline in 2025.
The pressure is especially high in petrochemicals and basic products, where China dominates with cheaper large-scale output. Natural gas prices in Europe are still about three times higher than in the U.S., a gap expected to last until 2030—further eroding Europe’s competitive position in global chemical markets.
Weak Demand from Automotive and Other Key Sectors
Domestic demand is shrinking. The EU automotive sector, one of the chemical industry’s most important customers, recorded a 4.5% production decline in early 2025.
Capacity utilization in the EU27 stood at 74.6%, far below historical averages and weaker than in the U.S. since 2022. Overall, chemical production in the EU remains 10% lower than before the 2014–2019 crisis years.
Trade Imbalances and Rising Imports
Globally, chemical production grew by 4.2% in the first half of 2025, but the EU27 contracted by 2.4%. In contrast, China rose 7.9%, Brazil 4.3%, and the U.S. 2.6%.
While exports from the EU27 increased, imports surged as well. China exported €17.1 billion worth of chemicals to the EU27 in 2025, up from under 1% market share in 2004 to 5.6% by 2024. The U.S. followed with €15.8 billion, and the UK with €9.8 billion.
The U.S. remains the EU’s top chemical export market (€23.1 billion), followed by the UK (€12.7 billion) and China (€8.8 billion).
Plant Closures Highlight the EU Chemical Industry Crisis
Several major players are shutting down facilities:
- Dow will close its Böhlen, Germany site (560,000 tons ethylene + 285,000 tons propylene) by 2027, plus assets in Schkopau.
- Its silicones plant in Barry, Wales, will close by mid-2026.
- INEOS Phenol will permanently halt production in Gladbeck, Germany.
INEOS chairman Jim Ratcliffe commented: “This is the result of Europe’s lack of energy competitiveness and blind carbon taxation, leading to mass deindustrialization.”
Reports suggest ExxonMobil plans to sell European plants due to U.S. tariffs and Chinese competition. LyondellBasell, SABIC, and PTT Chemicals are preparing similar moves.
Can the EU Chemical Sector Be Saved?
The European Commission has launched an Action Plan to support chemicals, but experts argue member states are responding too slowly. Without urgent measures to boost competitiveness, the EU chemical industry crisis 2025 could accelerate, leading to deeper job losses and factory closures across the continent.