European Chemical Industry Faces Crisis Amid Rising Energy Costs
February 5, 202632 AufrufeLesezeit: 3 Minuten
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A report published by "Oil Price" highlights a growing crisis affecting Europe’s chemical industry, a key sector on the continent. This situation arises from sharply rising energy costs and stricter environmental regulations within the European Union, posing a threat to the sector's future and stability.
Significant Drop in Investment and Production
The report, based on data from the "Financial Times" and the European Chemical Industry Council (Cefic), indicates that investments in the sector fell by up to 80% last year. Additionally, production capacity closures within the EU have increased sixfold since 2022, with projections suggesting a loss of approximately 37 million tons, equivalent to 9% of total production capacity, by 2025.
Job Losses and Decreased Competitiveness for European Firms
These closures have resulted in the loss of around 20,000 jobs, alongside a notable decline in new investment projects, putting the industry in a precarious position against global competitors, particularly in the U.S. and China, where energy is available at lower costs and regulatory restrictions are less stringent.
Loss of Russian Gas Intensifies Industrial Crisis
The report notes that the decline of the European chemical industry is closely tied to the loss of affordable energy sources, especially Russian gas, which was crucial for maintaining the sector's competitiveness. This industry is one of the most energy-intensive and significantly affected by rising operational costs.
Emission Reduction Policies Increase Economic Pressure
The report points out that European environmental policies aimed at reducing carbon emissions have raised production costs, diminishing the competitiveness of European firms in the global market and prompting some companies to relocate investments outside the continent.
Withdrawals and Closures of Major Plants
Other economic reports indicate that large international companies are reevaluating their presence in Europe. For instance, Saudi company "SABIC" has sold its assets on the continent, while "Dow" plans to close several of its factories in Germany due to rising energy costs, emissions, and weak demand. "Exxon" is also considering a similar exit from the European chemical sector, with two companies filing for bankruptcy for some of their branches.
Implications for Other Strategic Industries
The decline of the chemical industry does not only impact the sector itself but also affects other strategic industries that depend on it, such as the automotive and defense industries, raising concerns about broader economic repercussions within the European Union.
Calls for Review of Industrial and Environmental Policies
Marco Mensink, chairman of the European Chemical Industry Council, warned that the sector is under unprecedented pressure, noting that factory closure rates have doubled in a year and annual investments have nearly fallen to zero. He described the industry as the "mother of all industries," currently facing a genuine collapse. Estimates suggest that rescuing this sector may require a realignment of industrial and environmental policy priorities in Europe to balance environmental protection with the competitiveness of vital industries.
