Europe’s Chemical Industry Crisis Deepens as Domo Files for Insolvency
Europe's chemical industry is in deep crisis, highlighted by Domo Chemicals' German subsidiaries filing for insolvency due to weak demand, soaring energy costs, and Chinese competition. This reflects a broader trend of companies like BASF and Evonik cutting jobs and moving production abroad. High energy prices and regulatory burdens make Europe uncompetitive. Experts predict more plant closures and job losses, urging policymakers for urgent action to save the continent's vital chemical manufacturing sector.
Europe's chemical industry is grappling with an acute, deepening crisis, starkly exemplified by the insolvency of three German subsidiaries of Belgium's Domo Chemicals—Domo Chemicals, Domo Caproleuna, and Domo Engineering Plastics. Employing 585 workers, these entities cited persistently weak demand, soaring energy costs, and intense competition from Chinese imports as primary reasons for their collapse. This situation reflects a broader structural decline across the continent, with analysts estimating three-quarters of Germany’s energy-intensive chemical firms are now shifting investments and production abroad due to high energy prices and regulatory complexities.The crisis extends beyond Domo, with major players like BASF cutting 2,600 jobs, Evonik axing 2,000 positions, and Dow shuttering operations in the UK and Netherlands. Clariant anticipates over half its sales growth from China in the next five years, signaling a wider industry exodus. European chemical production volumes have plummeted 6-8% from pre-pandemic levels, with Germany experiencing a 15% decline and over 20 major plants closing. While natural gas prices have receded from their peak, they remain 40% above pre-2022 levels, leaving European producers at a significant disadvantage compared to regions with cheaper feedstocks and less stringent regulations. The Carbon Border Adjustment Mechanism offers limited protection. Industry leaders warn of a 'painful continuation' of plant closures, impacting interconnected supply chains like automotive and threatening Europe's strategic autonomy. While specialization in specialty or green chemicals is suggested, experts caution it's insufficient to counteract the collapse in commodity margins, urging policymakers for decisive action to preserve the remaining industrial chemistry capacity.
