AiBotEurope’s petrochemical sector is facing a severe crisis, with industry leaders announcing plant closures, asset sales, and cancelled investments. The situation has worsened over the past year, driven by factors such as high production costs, ageing plants, and growing global capacity, mainly in China. As a result, European chemical production capacity announced for closure has more than doubled in 2025 compared to the previous year, reaching 17.2 million tonnes annually.
According to the European Chemical Industry Council (Cefic), this represents a staggering 9% of European chemical production capacity, cumulatively affecting approximately 20,000 direct jobs. The decline in employment numbers has been exacerbated by the announcement of 37 million tonnes of capacity earmarked for closure since 2022. This downturn signifies a significant industrial retreat in the European petrochemical sector.
The European Commission attempted to respond to the crisis by proposing a chemicals industry action plan in July 2025. The plan included measures to create a Critical Chemical Alliance, strengthen trade defence mechanisms, lower energy costs, and provide additional state aid to energy-intensive industries. Furthermore, the Commission announced plans to update state-aid rules to cover additional chemical sectors. Despite these efforts, the situation has yet to stabilize, and manufacturers continue to reassess their presence in Europe.
Major players, including Eni’s Versalis, have been dismantling loss-making commodity chemicals operations in Italy, opting for bio-based chemicals, biorefineries, circularity, and higher-value products. Other prominent groups, such as Dow and ExxonMobil, have also been reducing their European exposure by closing or planning to close chemical assets. Dow, for instance, has approved the closure of its ethylene cracker in Böhlen, Germany, with the shutdown expected in the fourth quarter of 2027. ExxonMobil announced the shutdown of its Fife Ethylene Plant in Scotland, citing high supply costs, weak market conditions, and the UK economic and policy environment.
TotalEnergies, another prominent player, plans to close its oldest Antwerp steam cracker by the end of 2027, pointing to an expected European ethylene surplus and weaker demand. However, the company will retain a newer cracker at the site. China’s rapid expansion has exacerbated the situation, as large volumes of new capacity have eroded global margins, further pressuring European manufacturers.
As the situation continues to deteriorate, experts warn that the collapse of Europe’s petrochemical industry will have far-reaching consequences, affecting employment, economic growth, and the continent’s supply chain. The increasing competition from emerging markets, particularly China, is likely to accelerate the decline of European petrochemical production, further underscoring the need for effective policy interventions to support the sector and revitalize investment.