European Chemical Industry Council Warns: Plant Closures and Plummeting Investment Threaten Europe's Chemical Sector

On January 28, 2026, data from the European Chemical Industry Council (Cefic) reveals that chemical plant closures in Europe have surged since 2022, accounting for approximately 9% of total European capacity. Concurrently, new investments have sharply declined, raising intensifying concerns about the competitiveness and long-term viability of Europe's chemical industry.

Marco Mensink, Director General of Cefic, stated: "The entire sector is under immense pressure and on the brink. The plant closure rate has doubled within a year, and worse, annual investment has halved or dropped to nearly zero. Furthermore, both factors are accelerating rather than slowing down. We need decisive action this year that tangibly impacts at the plant level."

Over the past two decades, the global chemical industry landscape has undergone rapid rebalancing. In 2004, Europe accounted for 27% of global sales, but by 2024, this share had fallen to 13%. In contrast, China's share of global sales jumped from 10% to 46% over the same period. High energy costs, weak local demand, and pressure from low-cost imports have exacerbated Europe's difficulties.

Cefic highlighted the human and economic impact of the ongoing wave of closures. Beyond the direct loss of 20,000 jobs, an estimated additional 89,000 indirect jobs are at risk across Europe, reflecting the chemical industry's role in broader supply chains.

Cefic noted that the pace of new investment additions has drastically slowed, dropping from 2.7 million tons of new capacity in 2022 to just 0.3 million tons so far in 2025.

Cefic pointed out: "This drop reflects a shift in investment focus, from previously broad investments across various innovative paths like electrification, hydrogen feedstock, and circular plastics, to now conducting only a single pilot project."

"As plant closures outpace new investments, Europe's chemical sector is facing contraction. This trend indicates growing uncertainty within the industry and raises serious questions about Europe's ability to maintain a competitive and resilient industrial base."

Recently, the pace of plant closures has accelerated. In 2022, total announced closure capacity in Europe's chemical industry was 2.9 million tons, but by 2025, this figure had jumped to 17.2 million tons. Closures were concentrated in upstream petrochemicals (17.8 million tons), followed by basic inorganic chemicals (11.7 million tons), polymers (5.4 million tons), and specialty chemicals (2.0 million tons).

Regarding petrochemicals, about half of the announced closure capacity resulted from the shutdown of nine steam crackers—equivalent to a net reduction of 16% in Europe's cracker capacity.

Cefic stated that announced closures are spread across Europe but are most significant in major chemical-producing countries: Germany (8.8 million tons), the Netherlands (7.2 million tons), the United Kingdom (4.5 million tons), France (3.9 million tons), Italy (2.5 million tons), Belgium (2.3 million tons), and Spain (1.6 million tons). In half of the closure cases, companies cited energy cost competitiveness as the primary reason, followed by demand-related factors (19%), overcapacity (9%), and regulatory factors (8%).

During the same period, confirmed investments in the sector have fallen, from 2.7 million tons in 2022 to just 0.3 million tons in 2025. In terms of investment flow, confirmed investments in the petrochemicals segment from 2022-2025 amounted to 3.8 million tons—clearly insufficient to offset the 17.8 million tons of closures.

The largest confirmed capacity investments are located in Belgium (2.4 million tons), Germany (0.8 million tons), and France (0.4 million tons). While some investments are also flowing into projects related to the battery value chain (€1.9 billion), emission reduction (€1.9 billion), and recycling (€1.5 billion), Cefic notes that even these areas show an overall declining trend.