Europe’s chemical producers are shutting down aging facilities and losing ground to cheaper imports from the U.S., Middle East and China, deepening the region’s dependence on foreign supplies of essential plastics and industrial materials.
Francesca Landini, Pietro Lombardi, Mohi Narayan and Arathy Somasekhar report for Reuters.
In short:
- European crackers, which convert hydrocarbons into basic chemicals like ethylene, are running below profitable levels, with 40% of capacity at risk of closure.
- EU officials plan state aid and procurement preferences to protect domestic chemical production, but critics warn it may be too late to reverse long-term decline.
- Competitors in the U.S. and Middle East enjoy cheaper feedstocks, while China is rapidly expanding capacity and building export hubs to bypass Western tariffs.
Key quote:
"It's like being on the Titanic — you can't stay in denial. You must go and find a lifeboat."
— Giuseppe Ricci, head of industrial transformation at Eni
Why this matters:
Petrochemicals are the backbone of modern manufacturing, supplying everything from medical devices to food packaging. Europe’s retreat from domestic production raises fears of supply disruptions and higher prices, but also carries environmental implications: Reliance on foreign producers could shift pollution burdens abroad without reducing global emissions. At the same time, cheaper overseas output — fueled by shale gas in the U.S. and vast capacity in China — highlights how global energy markets and climate policy collide in ways that ripple through everyday goods and public health.
Learn more: European chemical industry struggles against US competition, says Ratcliffe
