Cefic: EU chemicals makers being left at "competitive disadvantage”

Brussels – The European chemicals industry recorded a 10.6% year-on-year decline in production over the first nine months of 2023, according to the European Chemical Industry Council (Cefic).

Capacity utilisation in the EU27 chemical industry continued to decline, reaching 74.1% in the third quarter, estimates from the Brussels-based industry assocation also show.

Manufacturers were impacted by the Russia-Ukraine war, weak demand, high energy costs, rising interest rates and inflation, noted a Cefic report issued in December.

Developments in competitor regions further added to the challenges, Cefic pointing particularly to the ‘US inflation reduction act’ signed into a law in August 2022.

Meanwhile, the EU chemicals industry is undergoing “the biggest transformation in the history of our sector [to become] “climate-neutral, circular and digital at the same time”.

Such a transformation, Cefic added, will require billions of additional investments between now and 2050.

“Creating a business case for investment in Europe should therefore be the main strategic political priority of the incoming European Commission,” Cefic said.

Presenting data for 2023 and the past decade, Cefic said Europe was at a “competitive disadvantage” compared to North America and Middle East, with 'ethylene cash cost' of regional steam crackers being more than double.

Furthermore, Cefic figures show that China widened its lead in global chemicals sales over the past decade, having increased its market share from 31% in 2012 to 44% in 2022.

At 14%, Europe remained the second largest manufacturing zone but lost 3% market-share over the ten-year period.

The decline is even more prominent when compared to EU’s global market-share in 2009, which peaked at 27%.

Buoyed by higher prices, the EU chemical sales increased significantly in 2022 to reach €760 billion, up from €618 billion the year before.