Europe's Chemical Industry Faces Multiple Crises

Europe's chemical and petrochemical sectors are confronting a 'multiple crisis', driven by weak local demand and significant new production capacity overseas, a senior industry leader has warned. The comments were made by Julia Schlenz, President of Dow Europe, Middle East, Africa and India, at the annual conference of the Federation of European Chemical Distributors (FECC). Ms Schlenz stated that the region's market share is shrinking due to a 'flood of imported products'. While acknowledging that rationalisation of chemical plants is underway in Europe, she stressed that the scale of announced capacity cuts is insufficient compared to global expansions. 'A mere 4% reduction in ethylene capacity cannot fundamentally resolve the issue', she said.

She emphasised that a recovery in consumer demand is critical, as purchasing patterns have shifted. The industry, she argued, must adapt quickly by increasing agility, improving efficiency, and making bold strategic decisions. Ms Schlenz also called for more supportive action from EU policymakers. She criticised current legislation, specifically the Carbon Border Adjustment Mechanism (CBAM) and the European Green Deal, for failing to adequately assist the chemical industry. She described the existing CBAM framework as unsuitable for complex value chains like polymers, thus compromising its intended effect. While praising the Green Deal's vision, she said its implementation has become bogged down in excessive detail. A particular flaw was highlighted within the EU Emissions Trading System (EU ETS), which she argued is currently encouraging deindustrialisation rather than fostering decarbonisation. Without foundational support for the green transition, she stated, the EU ETS simply adds to cost burdens.

Echoing concerns about European competitiveness, Richard Jenkins, Senior Vice President of Arkema Group, who participated in the same discussion, pointed to a closer alignment between the US government and industry on regulatory goals. He also noted that Europe lags behind China in certain sustainable development areas, such as electrification and green energy availability, adding that Europe requires large-scale advancements to achieve its decarbonisation objectives.