European Chemical Industry Contracts Amid Soaring Closures and Plummeting Investment
Europe's chemical industry is undergoing a significant contraction, with plant closures increasing sixfold since 2022, resulting in substantial lost capacity and 20,000 direct jobs eliminated, plus 89,000 indirect jobs at risk. The petrochemical sector is heavily impacted, with Germany and the Netherlands leading closures. High energy costs are the main reason, alongside low demand and regulations. New investment has dramatically declined, raising serious concerns about Europe's ability to maintain a competitive industrial base.
The European chemical industry is facing an unprecedented contraction, marked by a sixfold increase in plant closures since 2022. This severe downturn has led to the loss of 37 megatons of production capacity, representing approximately 9% of the continent's total, and the direct elimination of 20,000 jobs within the sector. Furthermore, an estimated 89,000 indirect jobs across Europe are now at risk, underscoring the chemical industry's crucial role in regional value chains, as highlighted by the European Chemical Closures & Investments Radar 2022–2025 by Roland Berger for Cefic.The petrochemical segment is particularly hard-hit, accounting for 48% of the announced capacity closures, with roughly half attributed to the planned shutdown of nine steam crackers. Geographically, Germany (25%) and the Netherlands (20%) together represent a significant 45% of the capacity slated for closure. The primary driver behind these closures is a lack of energy cost competitiveness, followed by low demand (19%), overcapacity (9%), and increasing regulations (8%).Compounding these challenges, new investment has dramatically slowed. Annual announced investment capacity plummeted from 2.7 megatons in 2022 to a mere 0.3 megatons year-to-date in 2025. This decline signifies a worrying shift away from broad investments in innovative areas like electrification, hydrogen feedstocks, and circular plastics, towards only limited pilot initiatives. The overwhelming pace of closures compared to new investments indicates a clear contraction of the European chemical industry, prompting serious questions regarding Europe's future capacity to maintain a competitive and resilient industrial foundation.
