May 12, 2025 15:39

Europe’s chemical sector is stalling. The latest quarterly report by Cefic – the European Chemical Industry Council – projects that production in 2025 may grow by no more than 0.5%, a sharp slowdown compared with the 2.4% increase recorded last year.

According to the association, the competitiveness of the European chemical industry remains under pressure in early 2025, with no signs of improvement on either the cost or demand side. The situation is worsened by heightened global trade tensions, especially those sparked by new U.S. tariffs.

Chemical output in the EU27 dropped by 0.3% in Q1 compared with the same period in 2024, and remains 9.1% below pre-crisis levels (2014–2019). Sales values increased by 0.9%, but this was mainly driven by a 1.1% rise in average prices over 2024.

According to Cefic’s Chemical Trends Report Q1 2025, production rose in Belgium (up 9.1%) and Poland (up 3.8%), with slight gains – less than 0.5% – in Germany and Italy. On the other hand, output declined in the Netherlands (down 6.1%), France (down 5.5%) and Spain (down 0.5%).

A telling indicator of the industry’s struggles is capacity utilization: in the first quarter of 2025, it stood at 74%, well below the EU’s long-term average of 81.4%, and consistently lower than U.S. levels since late 2022. The figure reflects a chronic underutilization of assets, a trend that has persisted for more than two years.

Europe’s competitiveness is further undermined by persistently high gas prices, which remain 3.3 times higher than in the United States, severely impacting energy-intensive sectors like chemicals.

External trade is also faltering. Last year’s trade surplus was inflated by weak domestic demand and a resulting drop in imports. However, Cefic warns that this trend is now reversing. In the first two months of 2025, the EU’s chemical trade surplus fell by 25% to €6.7 billion, as imports rose 10.2%.

Europe’s chemical industry is at a crossroads. Without urgent, structural interventions – especially in energy and trade policy – its ability to support economic growth, strategic autonomy and the EU’s green transition is at serious risk. According to Cefic, Europe must create a climate conducive to industrial investment, ensuring access to competitive energy and a streamlined regulatory environment, so the industry can leverage its strengths in an increasingly competitive and fragmented global landscape.

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