Europe's Rescue Package for the Chemicals Sector

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The European Commission (EC) has outlined a package of measures to help support its struggling chemicals sector.

The Action Plan for the Chemicals Industry aims to address the key challenges facing the sector, including high energy costs, unfair global competition and weak demand. The EC is hoping to slow the ongoing closure of European chemical plants and to strengthen the competitiveness and modernization of its chemicals sector. Alongside reducing costs, it has pledged to cut the red tape and reduce the administrative burden on the sector by simplifying hazardous chemical-labelling rules, clarifying European Union (EU) cosmetics regulations and easing registration for EU fertilizing products. In recent weeks, Industrial Info reported that Dow Incorporated (Midland, Michigan) had announced the planned closure of three plants in Europe with the loss of around 800 jobs. Blaming "structural challenges" in the region, it will shut its ethylene cracker in Böhlen, Germany, and its chlor-alkali and vinyl (CAV) assets in Schkopau, Germany, by the end of 2027, as well as its basics siloxanes plant in Barry in the U.K. by mid-2026. For additional information, see July 15, 2025, article - Dow Shutting Three European Chemical Plants. The Action Plan has been called "too little, too late" by some in the industry.

"Chemicals is the mother of all industries, with over 96% of manufactured goods relying on chemicals," said Stéphane Séjourné, executive vice president for Prosperity and Industrial Strategy at the EC. "Today's action plan on chemicals is our business plan to secure this critical sector's future in Europe. It includes all levers to put the sector back on a growth track, from production-support measures to keep our steam-crackers and chemical sites in Europe, to trade defence instruments to protect our chemical businesses from unfair global competition, all the way to securing domestic demand for clean and 'made in Europe' chemicals." Industrial Info is tracking almost 3,000 projects in the European chemicals sector worth US$192 billion in investment. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for the reports.

The plan calls for the formation of a Critical Chemical Alliance with leading players to address the risks of capacity closures in the sector by identifying critical production sites needing support. The Commission has promised to tackle trade issues like supply chain dependencies and distortions as well as to "swiftly apply trade defence measures to ensure fair competition, while expanding chemical import monitoring through the existing Import Surveillance Task Force." The Commission said it will implement "at full speed" the Affordable Energy Action Plan to help reduce high energy and feedstock costs. It will also offer fiscal incentives and tax measures to boost demand for clean chemicals, while continuing to minimize the use of per- and polyfluoroalkyl substances (PFAS).

Valdis Dombrovskis, commissioner for Economy and Productivity; Implementation and Simplification, said: "Simpler, clearer rules on product labelling for chemicals, as well as for cosmetics and fertilisers, will benefit both businesses and consumers. Likewise, streamlined procedures for product authorizations will save time and money for companies, particularly for small and medium sized enterprises, freeing them to innovate, develop new products and new markets. We expect today's package to yield over 350 million euro (US$407 million) in annual savings, adding to the over 8 billion euro (US$9.3 billion) in savings in previous omnibuses this year. With this, we remain on track to identify at least 37.5 billion euro (US$43.6 billion) in savings through our simplification agenda."

The Action Plan was both welcomed and criticised from different quarters. INEOS Limited (London, England) said it was "disappointed that the EU Chemical Industry Action Plan fails to address the urgency of industry's position," pointing out that In the past two years, more than 20 chemical plants have closed across the continent. Tom Crotty, director of corporate affairs at INEOS said: "The Chemical Industry Action Plan is too little, too late. It fails to address the real issues, while the US and China race off with the keys to our industrial base. Europe talks, they act, and that's why investment, innovation and jobs are packing their bags and heading elsewhere. The Plan fails to tackle two of the most immediate pressing threats to the survival of Europe's chemical industry: firstly, the high cost of gas and secondly, the escalating cost of carbon emissions. Without urgent and bold action in these areas, Europe's competitiveness will continue to erode."

The region's main chemical sector group, CEFIC, welcomed the plan and called it a "serious effort" from the European Commission to turn the tide for the "industry of industries" in Europe. Dr. Ilham Kadri, CEFIC President, said: "The plan is a make-or-break moment for our industry and we are glad that our calls for action have been heard. Now we need swift implementation and strong political coordination across the EU to turn this momentum into results."

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).