Europe’s petrochemical industry is struggling with China’s global capacity expansion and the closure of plants following years of losses. High production costs and aging facilities are challenging European producers and making the region dependent on imports of essential chemicals such as ethylene and propylene.
< ... The Italian energy group Eni plans to increase state aid for products like ethylene and propylene and prioritize domestic production in public tenders. However, this step may be too late to offset the losses.
Giuseppe Ricci, head of industrial transformation at Italian energy group Eni, said, “It’s like being on the Titanic, you can’t deny it, you have to find a lifeboat.” Eni’s chemical unit, Versalis, has lost €3 billion in the last 5 years and is closing its last two steam crackers in Italy, investing in biorefineries and chemical recycling.
Other global companies are also closing or reviewing their petrochemical assets in Europe.
Most closure plans target cracker units that convert hydrocarbons into ethylene and propylene.Plants in Europe are generally small to medium-sized and operate at less than 80% efficiency. According to Wood Mackenzie, 40% of Europe’s ethylene capacity is at risk of closure.
The US and the Middle East have a competitive advantage over Europe in ethylene production by using cheaper raw materials.
Europe was an importer of ethylene and propylene every year between 2019 and 2023.< ... INEOS is building a new ethane cracker in Antwerp for €4 billion. This will be the first new cracker in Europe in the last 30 years. Mergers in the Middle East are creating new global giants. The $60 billion merger of Abu Dhabi National Petroleum Company and OMV will create the Borouge Group, making it the world's fourth-largest polyolefin producer. Analysts say that petrochemical production in Europe will not disappear completely, but only the big players will remain in the market. Independent Petroleum Corporation of Europe is building a new ethane cracker in Antwerp for €4 billion. This will be the first new cracker in Europe in the last 30 years. Analysts say that the merger of Abu Dhabi National Petroleum Company and OMV for $60 billion will create the Borouge Group, making it the world's fourth-largest polyolefin producer. Analysts say that petrochemical production in Europe will not disappear completely, but only the big players will remain in the market. Analysts say that petrochemical production in Europe will not disappear completely, but only the big players will remain in the market. Analysts say that petrochemical production in Europe will not disappear completely, but only the big players will remain in the market. Analysts say that petrochemical production in Europe will not disappear completely, but only the big players will remain in the market.
