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The lights at the LyondellBasell plant in the port of Rotterdam went out for the last time on a September afternoon. The factory, which produced propylene oxide — an essential raw material for foams, mattresses and auto parts — had just been dismantled. A silent symbol of a fading era. The plant, barely 22 years old, became another victim of a storm that is hitting the European industrial heart: expensive energy, Asian competition and disinvestment. Europe, once a world chemical power, has lost its industrial pulse to China. The perfect storm. The sequence began with the war in Ukraine. The Russian gas cutoff energy prices skyrocketed in Europe and exposed a fatal dependence. “Gas costs in the Netherlands were between 15% and 66% higher than in other European countries,” economist Edse Dantuma explained to NRC. However, the decisive blow came from further east. From that same period, an avalanche of Chinese chemicals began to flood the European market. “During the pandemic, China completed all stages of its chemical value chain without us realizing it,” Manon Bloemer explained.director of the Dutch association VNCI. “Later, with domestic demand stagnant, they began to export their surpluses,” he added. Europe was paying the most expensive energy in the world and, at the same time, facing the lowest prices in history. In the UK, Ineos—Sir Jim Ratcliffe’s petrochemical giant— was forced to lay off staff due to “very cheap” imports from China, made with coal and with CO₂ emissions up to eight times higher. The same symptoms are repeated in Germany. According to ICISGerman chemical production (excluding pharmaceuticals) will fall by at least 2% this year. Economist Christiane Kellermann, from the VCI, warned that “Capacity utilization remains low, even with plants closed. More production shutdowns are coming.” The end of a European era. For decades, Europe was the world’s laboratory. The petrochemical complexes of Rotterdam, Ludwigshafen and Antwerp symbolized the industrial modernity of the continent. But now, warns the joint study by Cefic and Advancythe European sector “faces a historic turning point: structurally higher costs, regulatory overload and investment flight threaten its survival.” According to this report, Europe has lost 30% of its chemical production in the last decade and new investments have been reduced to historic lows. In Germany, Strategy&PwC estimates that chemical investments They have fallen by 90% since seven years ago and profits have been reduced by 12%. Incoming orders are at their lowest level in ten years. “Deindustrialization is no longer a risk, it is a reality,” this research warns. “Neither Europe nor Germany benefit from global growth anymore. Investment decisions are made on other continents.” China, the new epicenter. Meanwhile, the Asian giant is investing on an unprecedented scale. According to Global Datathe country will account for more than 60% of the world’s new petrochemical projects until 2030, with more than 500 plants underway. Analyst Bhargavi Gandham explains that this boom responds to “a deliberate policy of self-sufficiency, supported by cheap financing, state planning and domestic demand.” From Roland Berger point out in a recent report: “China not only produces more; it has become the global price setter in multiple value chains.” The consulting firm identifies unprecedented levels of overcapacity: with such a surplus, China could supply the entire Western market and still retain idle capacity. China’s dominance in petrochemicals reinforces its strategic influence over critical industries—from batteries to fertilizers—a lever of industrial power that Europe no longer controls. Beijing is aware of the problem. According to Bloombergthe Ministry of Industry plans to convert or close obsolete plants more than 20 years old and promote the transition towards advanced chemicals, used in semiconductors, batteries or biomedicine. AND, as detailed by Reutersthe Chinese Government itself called this October to the main producers of plastics and fibers to stop internal “destructive competition” in products such as PTA or PET. But the result, for now, is that the Chinese excess puts pressure on global prices. And Europe, caught between its energy costs and its climate goals, cannot compete. The old continent without defenses. “The system is like a Jenga tower,” Ronald van Klaveren told NRC. “Take away one piece and it holds. Take away three and it collapses.” Every closure in Europe endangers an entire ecosystem of factories connected by pipelines of steam, heat and raw materials. In Rotterdam, Chemelot or the Ruhr, the closure of a plant affects dozens of suppliers. In the industrial regions of the Rhine or Limburg, each blackout translates into hundreds of lost jobs and entire communities in decline, evoking the reconversions of the 1980s. Meanwhile, the political framework moves slowly. In the summer the European Commission presented its “Chemical Industry Action Plan“, that, according to Dutch industrialists“has good intentions but few concrete measures.” The industry is asking for three things: affordable energy, equivalent rules for imports and a competitive tax framework. In Germany, the Helaba bank warns of a “Chinese shock 2.0”: After China joined the WTO in 2001, its exports focused on toys and textiles; Today it competes in machinery, automotive and high-tech chemistry. “The result is enormous pressure on prices,” said economist Adrian Keppler. And in the UK, Ineos Acetyls director David Brooks was more direct for The Guardian: “The UK and Europe are sleepwalking towards deindustrialisation. If governments do not act now on energy, carbon and trade, we will continue to lose factories, talent and jobs.” What’s coming now? Europe wants to reinvent its chemistry, but it does not have the conditions to do so. The Cefic and Advancy report warns that 40% of European plants could close before 2040 if the transition to low-carbon materials and high-value products is not accelerated. To comply with the Green Deal, more than 2 trillion euros in investment would be needed until 2050, according to Consultancy. The problem is that no one wants to invest where energy costs more, the rules change every year and permits take months or even years. Some experts, as Alexander Baumgartner by Roland Bergerbelieve that the way out is to “abandon … Read more