Europe’s petrochemical industry is in crisis as plant closures accelerate, driven by years of heavy losses and fierce competition from new, low-cost capacity in China.
High energy costs and outdated facilities have left European producers struggling to compete, forcing the region to rely increasingly on imports of key chemicals like ethylene and propylene, crucial for plastics, pharmaceuticals, and industrial goods.
“While the rest of the world is building over 20 new crackers, Europe is sleepwalking into industrial decline,” warned INEOS founder Jim Ratcliffe, criticising the lack of political action.
In response, the European Commission has promised support for domestic production of strategic chemicals, expanding state aid for modernisation and requiring tenders to prioritise EU-made goods. Yet experts fear it may be too late.
Losses are mounting. Eni’s Versalis has closed its last two Italian crackers after losing €3.5 billion in five years. Dow, ExxonMobil, TotalEnergies, and Shell are also cutting European operations. Consultancy Wood Mackenzie estimates up to 40% of EU ethylene capacity, about 24.5 million tonnes, is at risk, threatening 50,000 jobs by 2035.
Competition is fierce: the U.S. and Middle East produce ethylene far cheaper using ethane, while China’s annual capacity will triple Europe’s by 2030. Policymakers now face a stark choice: invest heavily to save the industry or watch Europe become dependent on imports for its chemical backbone.
