Investment in Europe’s chemicals sector fell over 80 per cent in 2025 and plant closures doubled, as industry leaders warned that the continent would become dependent on China for the raw materials needed in its automotive, healthcare and defence industries.
Confirmed investments fell from 1.9 megatonnes of capacity in 2024 to 0.3 megatonnes last year, as the sector struggled with high energy prices, suffocating bureaucracy and an expansion of Chinese imports, according to a report published on Wednesday by the European Chemical Industry Council (Cefic).
The announced plant closures had directly affected about 20,000 jobs across Europe since 2022 and led to 17.2 megatonnes worth of production capacity disappearing last year, double that from 2024 and a sixfold rise from 2022, Cefic said.
“If you want a defence sector . . . an automotive sector, it’s totally dependent on chemicals supplying the materials. This is simply a chokehold the rest of the world has on Europe,” said Marco Mensink, director-general of Cefic.
“We are now 95 per cent dependent on vitamins from China and India,” he added. The chemicals sector was “the mother of all industries and it’s breaking down as we speak”, he warned.
Over the past four years, businesses across Europe have said they will shutter plants making chemicals ranging from the chlorine needed to treat drinking water to the phenols used in printed circuit boards and paracetamol. The closures have led to the loss of about 9 per cent of Europe’s chemical production capacity, according to Cefic.
Investors have scaled back plans to invest on the continent or pulled out entirely, having been hit by onerous carbon taxes and cheap imports from China.
Industry leaders, including Ineos’s Sir Jim Ratcliffe, have warned that without action, Europe would be “dependent on China for the core materials that support defence, healthcare, food and manufacturing”. Ineos last year filed 10 anti-dumping cases against imports of cheap chemical products into the EU and closed production facilities in Germany, calling on the bloc for “tariff protection”.
This month, Vioneo, a subsidiary of AP Møller-Maersk, abandoned plans for a green plastics plant in Antwerp, Belgium, in favour of constructing a plant in China that it said was closer to supplies of green methanol and would be cheaper to build.
The chemicals industry was behind a cross-industry statement signed in Antwerp by some 1,300 organisations and businesses in 2024 stressing the “urgent need for clarity, predictability and confidence in Europe and its industrial policy”.
It is planning a third Antwerp summit this year amid fears that not enough has been done to halt the decline of European heavy industry.
Cefic’s Mensink said policymakers in Europe had belatedly begun to face up to the challenges facing the sector but that progress was too slow. “What you see is that the world is changing faster than policymakers catch up at the moment. They need to go from third to fifth gear.”
The European Commission in July presented a policy document laying out actions it would take to support the chemicals sector, including efforts to designate critical chemicals and production sites to help co-ordinate funding, to speed up permitting of industrial sites and improve monitoring of trade flows.
Energy prices, which soared after Russia’s full-scale invasion of Ukraine, make up about 75 per cent of production costs for petrochemicals and remain stubbornly high. Phasing out Russian gas, which the EU aims to ban by 2027, has meant that the bloc has become reliant on global markets for more expensive liquefied natural gas.
Companies are also struggling with the bloc’s ambitious green agenda, which commits EU countries to reach net zero emissions by 2050, but has introduced vast amounts of red tape in pursuit of that goal.
