European Chemical Industry Warns of Plant Closures and Plummeting Investment Threatening Sector

According to data from the European Chemical Industry Council (Cefic), on January 28, 2026, Europe... since 2022. The surge in plant closures, accounting for approximately 9% of Europe's total capacity, coupled with a sharp decline in new investments, is raising growing concerns about the competitiveness and long-term viability of the European chemical industry.

"Marco Mensink, Director General of Cefic, the European Chemical Industry Council, said: “The whole industry is under enormous pressure, close to collapse. Plant shutdowns have doubled in a year, and even worse, annual investments have halved or are close to zero. And both are accelerating, not slowing down. We need decisive action this year that actually impacts the plant level.”"

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

The European Chemical Industry Council (Cefic) highlights the impact of ongoing plant closures on people and the economy. In addition to the direct loss of 20,000 jobs, an estimated 89,000 indirect jobs are at risk across Europe, reflecting the chemical industry's role in the broader supply chain.

The European Chemical Industry Council (Cefic) stated that the growth of new investments has significantly slowed, from 2.7 million tons of new capacity in 2022 to only 0.3 million tons so far in 2025.

"This decline reflects a shift in investment focus, from broad investments in multiple innovative pathways such as electrification, hydrogen feedstock, and circular plastics, to now only undertaking a single pilot project," notes Cefic, the European Chemical Industry Council.

"Europe's chemical industry is shrinking, with plant closures far outstripping new investments. This trend highlights the sector's increasing uncertainty and raises serious questions about Europe's ability to maintain a competitive and resilient industrial base."

The pace of factory closures has accelerated recently. In 2022, the European chemical industry announced the closure of factories with a total capacity of 2.9 million tons, but by 2025, this figure has surged to 17.2 million tons. The closures are primarily 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 million tons).

Approximately half of the announced closures in petrochemical capacity are due to the shutdown of nine steam crackers, equivalent to a net reduction of 16% of Europe's cracking capacity.

The European Chemical Industry Council (Cefic) stated that the announced plant closures are spread across Europe, but are mainly concentrated in major chemical industry countries such as Germany (8.8 million tonnes), the Netherlands (7.2 million tonnes), the UK (4.5 million tonnes), France (3.9 million tonnes), Italy (2.5 million tonnes), Belgium (2.3 million tonnes), and Spain (1.6 million tonnes). In half of the plant closure cases, companies cited energy cost competitiveness as the main reason, followed by demand-related factors (19%), overcapacity (9%), and regulatory factors (8%).

During the same period, confirmed investment in the industry declined from 2.7 million tonnes in 2022 to just 0.3 million tonnes by 2025. In terms of investment flow, confirmed investment in the petrochemical sector reached 3.8 million tonnes between 2022 and 2025—but this is clearly insufficient to offset the 17.8 million tonnes of capacity closures.

The largest confirmed capacity investment projects are located in Belgium (2.4 million tons), Germany (800,000 tons), and France (400,000 tons). While some investments have also gone into battery value chain-related projects (€1.9 billion), emission reduction projects (€1.9 billion), and recycling projects (€1.5 billion), the European Chemical Industry Council (Cefic) notes that even these areas show an overall downward trend.