Europe's Chemical Industry on Brink of Collapse: 20,000 Jobs Lost in 4 Years, 37 Million Tons of Production Capacity Shut Down

On January 28th, a report released by the European Chemical Industry Council (Cefic) showed that between 2022 and 2025, European chemical industry capacity closures surged sixfold, with a cumulative loss of 37 million tons of capacity over four years, accounting for approximately 9% of Europe's total chemical capacity. This resulted in the direct unemployment of 20,000 people. Concurrently, new investments and capital expenditures have significantly decreased, indicating growing concerns among industry insiders about the competitiveness and long-term survival of the European chemical industry.

Cefic Director General Marco Mensink warned: "The European chemical industry is under immense pressure and on the verge of collapse, with the rate of plant closures doubling in a year. Even worse, annual investment has halved, almost to zero. The situation is getting worse, not better. Decisive action is needed this year, and these measures must directly translate into production at the factory level."

Reports show a sixfold increase in announced plant capacity shutdowns in the European chemical industry between 2022 and 2025 – from 2.9 million tons shut down in 2022, to 8.7 million tons in 2023, 8 million tons in 2024, and a surge to 17.2 million tons in 2025. Cumulative plant capacity shutdowns reached 37 million tons by 2025.

By industry, the upstream petrochemical industry saw a 14% reduction in capacity, with 17.8 million tons of capacity shut down, accounting for 48%; followed by the basic inorganic chemicals sector, with 11.7 million tons of capacity shut down, accounting for 32%; the polymer industry saw 5.4 million tons of capacity shut down, accounting for 15%; and the specialty chemicals industry had 2 million tons of capacity shut down, accounting for 5%.

A wave of chemical plant closures is sweeping across Europe, with a lack of competitive energy costs being a major reason. The countries most affected, in descending order, are Germany (8.8 million tons, 25%), the Netherlands (7.2 million tons, 20%), the United Kingdom (4.5 million tons, 12%), France (3.9 million tons, 10%), Italy (2.5 million tons, 7%), Belgium (2.3 million tons, 6%), Spain (1.6 million tons, 4%), and other European countries with a total of 6 million tons of closed capacity (16%).

The report highlights the economic and social impact of the current wave of chemical plant closures: in addition to the direct loss of 20,000 jobs, approximately 89,000 indirect jobs are at risk across Europe.

To make matters worse, new investment and capital expenditures have plummeted. The announced annual investment volume in the European chemical industry dropped sharply from 2.7 million tons in 2022 to 300,000 tons in 2025, with a total investment volume of approximately 7 million tons over four years. Confirmed capital expenditures have decreased by 81%: from 7.6 billion euros in 2022 to 1.5 billion euros in 2025.

The report indicates that this decline reflects a shift in investment focus: previously, there were substantial investments in various innovative areas such as electrification, hydrogen feedstock, and recycled plastics, but now only a few pilot projects remain.

A report warns that Europe's chemical industry is shrinking as businesses are closing much faster than new investments are being built. This trend highlights the industry's growing uncertainty and raises serious questions about whether Europe can still maintain a competitive and resilient industrial base.