Over 15 Million Tons/Year of Production Capacity to Shut Down! The Coldness of Europe's Chemical Industry Is Evident

The European chemical industry is facing profound difficulties, and to overcome the current challenges, it must accelerate its transformation and explore new operational models. If it can successfully navigate this transformation, the recovery of the European chemical industry is promising. This viewpoint was shared by many participants at the recent 59th annual meeting of the European Petrochemical Association (EPCA) held in Berlin.

Ilham Kadri, President of the European Chemical Industry Council (Cefic), stated: "Berlin remains the ideal place to host this year's chemical conference. The Brandenburg Gate has witnessed centuries of unity and division, hardship and rebirth. I can't think of a better symbol for our industry, which, despite being tested, has already nurtured the seeds of recovery."

Sania Magdeburg, Vice President of Brenntag Specialties responsible for the EMEA region, organized a special discussion on the topic. Magdeburg stated, "Innovation, technological reserves, and quality are Europe's advantages. We need to find new production methods, develop higher value-added products, and focus on new value areas such as the circular economy. All of this requires policy support as well as consumer recognition. I hope Europe can seize these opportunities, but we must accelerate, as other countries are also actively vying for business opportunities."

Currently, the sentiment in the European chemical industry is downcast: weak demand, high energy costs, and low-priced imported products continuously impacting the market, with almost no mention of a rebound in industry activity next year. Kadri pointed out, "These are not abstract issues, but real challenges that many here face daily. However, a crisis often presents an opportunity for self-transformation." Magdeburg noted, "Although the mood at this conference is not optimistic, there are no signs of panic. We have been struggling in such predicaments for several years and have recently weathered several crises. We may face more challenges in the future. The industry is not panicking, but there is concern that this crisis may last longer than expected, and no one knows when a turnaround will occur. Although certain specialized application areas, such as nutritional chemicals and pharmaceutical chemicals, show some resilience, overall, the entire chemical industry is still collectively under market pressure."

Looking to the future, Magdeburg believes that due to the widespread shutdown of upstream capacity and the current pressure on infrastructure, the European chemical market will see an increase in import volumes, particularly in the bulk commodity sector. Facing such pressures, European producers need to explore different business models with a focus on speed, supported by regulatory authorities.

Earlier this year, the European Union launched the "Chemicals Industry Action Plan," but the plan itself has not prevented further shutdowns of chemical production capacity in Europe over the past few months. Magdeburg emphasized that one of Europe’s significant advantages is "viewing Europe as a cohesive region." She explained that to fully leverage the interconnected advantages of EU membership, cross-border supply chain planning is crucial. Countries should work together to make this advantage a driving force for the future development of the industry. Kadri stated, "The action plan alone cannot pay the bills or erase the pain of lost orders and factory closures, but it does mark a turning point. It shows that Europe is listening to our voices, and listening is the first step. Our demands carry weight, our contributions are recognized, and we are not fighting alone. The real work lies ahead: turning commitments into actions, converting policies into growth, and ensuring that Europe remains a fertile ground for investment."

Kaderi stated that the European chemical industry aims not only for "survival" but also for "real success." This requires the industry to proactively embrace challenges and become a driver of market transformation, while also needing timely and coherent support from legislative bodies, regulatory authorities, and lobbying groups. Kaderi emphasized, “Our industry has faced difficulties many times in the past and will continue to face challenges in the future, but with unity, resilience, and ambition, we will ultimately overcome everything.”