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European chemical industry looking rescue:
The European petrochemical industry is disintegrated under the weight of a wave of factories. For example, after years of loss and rapid expansion of global capacities, led by China.
High production costs. Therefore, aging installations leave European producers in difficulty, making the region increasingly dependent on imports of basic chemicals such as ethylene and propylene, essential elements for the manufacture of plastics, pharmaceutical products and a multitude of industrial goods.
“While the rest of the world built more than 20 new vapoccasians. Moreover, Europe is advancing in the sleepwalker towards industrial decline,” said Jim Ratcliffe, founder of ineos, during a recent event, referring to a key unit of petrochemical factories.
The billionaire. Therefore, who made a fortune by buying petrochemical factories with BP and other groups, critical, like other sector leaders, political inaction.
The European Commission reacted this month by promising to european chemical industry looking rescue support the national production of chemicals deemed strategic for its industries. Consequently, such as ethylene and propylene. Moreover, It plans to expand state aid to modernize facilities. Moreover, demand that public procurement favor products manufactured in Europe, like European legislation of 2023 on metals and minerals.
But this measure could happen too late to reverse the damage.
“It’s like being on the Titanic: you can’t stay in denial. Consequently, You have to find a rescue canoe, ”said Giuseppe Ricci, responsible for industrial transformation within the Eni Italian energy group.
The chemical branch of Eni. towardsalis, has accumulated more than 3 billion euros in losses in the past five years, said Ricci, while the company closes the last two Vapoccquers of Italy and invests 2 billion euros in bioraffineries and chemical recycling.
Other global groups such as Dow, Exxonmobil, Totalenergies and Shells ferment or also re -evaluate their European chemical assets.
european chemical industry looking rescue Most of the envisaged closings concern vapoccquerors, units that transform hydrocarbons into ethylene, propylene or other chemical raw materials.
A document published in March by eight EU countries on petrochemicals indicates that 50. 000 jobs could be threatened by the potential closure of new vapoccashers in Europe by 2035.
European factories are mainly small to medium. operate at an average rate of average use of less than 80 % – a threshold deemed not profitable.
Up to 40 % of the European capacity in ethylene – which amounts to 24.5 million tonnes – is at high risk. average closure, including the stops announced since the end of 2024, according to the consulting firm Wood Mackenzie.
“The proportion of threatened European vapocchers is much higher than in other regions. ” said Robert Gilfillan, head of plastic and recycling markets at Wood Mackenzie.
While the oldest European factories use naphta as a european chemical industry looking rescue raw material. the United States and the Middle East are betting on cheaper raw materials, such as ethane, underproduce of shale gas.
A new dependence
The American capacity in ethylene will reach 58 million tonnes by 2030. against 54 million currently, according to the firm Adi Analytics.
China, for its part, will add 6.5 % ethylene capacity each year between 2025. 2030, reaching almost 87 million tonnes of annual, said in May Huang Yinguo, CEO of China National Chemical Information Center.
This represents more triple of the current EU capacity.
Chinese producers also install antennas in Southeast Asia to export to Europe. North America, thus circumventing Western carbon taxes and customs duties on products made in China.
Japanese. South Korean companies, unable to compete, have maintained low use rates since 2023, according to national petrochemical federations in reports published in May.
European decision -makers are now facing a crucial choice: intervening european chemical industry looking rescue decisively. looking at the chemical spine of the continent crumble.
In their March document. countries like France, Italy and Spain have called for a “critical chemical law”, while the latest EU data show that the region has been clearly importing ethylene and propylene each year between 2019 and 2023.
The European Commissioner for Industry, Stéphane Séjourné, said that Brussels will identify strategic supplies and production sites.
“Above all, it is sovereignty: to keep our vapoccquers,” he told the press this month.
But sovereignty has a price. Most of the European vapoccquers are over 40 years old, against only 11 years in China, according to Citi Sebastian Satz analyst. And European ethylene production from Naphta costs $ 800 per ton. against less than $ 400 per tonne in the United States with ethane, and about $ 200 per tonne in the Middle East, according to an ENI presentation published in March.
“Somnambulism european chemical industry looking rescue towards decline”
Some groups are focusing on their survival.
Ineos. which operates one of the most advanced petrochemical sites in Europe in Cologne, built a vapocker with ethane of 4 billion euros in Antwerp – the first new vapoccker in Europe for almost 30 years, with a production capacity of 1.45 million tonnes of ethylene per year.
The factory. which was to enter service in 2026, aims to compete with Chinese production and meet local demand with a reduced carbon footprint.
In the Middle East, consolidation gives birth to new world giants.
The merger at 60 billion dollars between Abu Dhabi National Oil Company. the Austrian OMV will give birth to Borouge Group, the fourth world producer of polyolefins. The company plans to export polymers to Europe, in direct competition with American and Asian groups.
Analysts believe that European petrochemical production will not completely disappear, but will become the field european chemical industry looking rescue of some dominant players.
“Only large European companies. capable of imposing competitive prices, will continue to produce Ethylene,” said Enzo Baglieri, professor of management of operations and technologies at the SDA Bocconi School of Management in Milan.
(1 $ = 0,8604 euros)
European chemical industry looking rescue
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