International Report Sounds Alarm: European Chemical Industry on the Brink of Collapse

A report published by "Oil Price" warns of a growing crisis hitting the chemical industry in Europe, one of the continent's most important industrial sectors, due to the significant rise in energy costs and tightening environmental regulations within the European Union, threatening the future and sustainability of the sector.

Sharp Decline in Investments and Production

The report relied on data reported by the "Financial Times" from the European Chemical Industry Council (Cefic), showing that investments in the sector have decreased by up to 80% over the past year. Additionally, the number of production capacity closures within the European Union has increased sixfold since 2022, reaching about 37 million tons by 2025, which is equivalent to 9% of total production capacity.

Job Losses and Declining Competitiveness of European Companies

These closures have led to the loss of about 20,000 jobs, alongside a noticeable decline in the launch of new investment projects, placing the industry in a precarious position against global competitors, especially in the United States and China, where energy is available at lower prices and regulatory constraints are lighter.

Loss of Russian Gas Exacerbates the Industrial Crisis

The report indicates that the decline of the European chemical industry is closely linked to the loss of cheap energy sources, particularly Russian gas, which was a key element in maintaining the sector's competitiveness. This industry is one of the most energy-dependent and reliant on oil derivatives, making it the most affected by rising operating costs.

Emission Reduction Policies Increase Economic Pressures

The report noted that European environmental policies focused on reducing carbon emissions have contributed to rising production costs, leading to a decline in the ability of European companies to compete globally, prompting some companies to relocate their investments outside the continent.

Withdrawals and Closures of Major Factories

According to other economic reports, major global companies have begun to reconsider their presence in Europe, with Saudi company "SABIC" selling its assets on the continent, while "Dow" plans to close several of its factories in Germany due to rising energy costs and emissions, along with weak demand. "Exxon" is also considering a similar step and exiting the European chemical sector, while two companies have filed for bankruptcy for some of their branches.

Implications Extend to Other Strategic Industries

The impact of the decline in the chemical industry is not limited to the sector itself but extends to other strategic industries that directly depend on it, such as the automotive and defense industries, raising concerns about broader economic repercussions within the European Union.

Calls to Reassess Industrial and Environmental Policies

Marco Mensink, the head of the European Chemical Industry Council, warned that the sector is facing unprecedented pressures, noting that factory closure rates have doubled within a year, and annual investments have dropped to nearly zero, describing the industry as the "mother of all industries" undergoing a real collapse phase.
Estimates suggest that saving this sector may require a reordering of priorities in industrial and environmental policies in Europe to achieve a balance between environmental protection requirements and maintaining the competitiveness of vital industries.