Europes chemical industry is quietly unraveling, and Americans should be paying very close attention. What is happening across the Atlantic is not simply a story of industrial decline. It is a warning sign for the United States about what happens when with global competition, especially from China. If Washington does not act, the same pressures now hollowing out Europes chemical base could undermine Americas position as a global chemical producer over the next decade. After all, it is just as true in the United States as it is in Europe that excessive regulation combined with a flood of Chinese imports is a double hit few industries can withstand for long.
The numbers alone are staggering. A recent story in the Financial Times disclosed that investment in Europes chemicals sector fell more than 80% in 2025, collapsing from 1.9 million tons of new capacity in 2024 to just 0.3 million tons last year. At the same time, plant closures doubled. Since 2022, around 20,000 jobs have been directly affected, and 37 million tons of production capacity â representing ~9% of â have disappeared. What we are witnessing is the structural decline of Europes chemical manufacturing sector, which produces all the building blocks for modern life.
Industry leaders in Europe are clear about what is driving this decline: high energy prices, suffocating bureaucracy, , and a flood of cheaper imports from China. Chemicals are among the most energy-intensive products in the economy, with energy accounting for a significant share of petrochemical production costs. Chinese producers benefit from access to discounted oil from sanctioned suppliers, in effect creating a parallel trading network that provides cheap feedstock for Chinese petrochemical production. This gives Chinese chemical manufacturers a structural cost advantage in global markets and allows them to undercut Western competitors that lack access to those cheaper feedstocks. When you add carbon pricing, painfully slow permitting, and a veritable maze of regulatory requirements tied to the EUs net-zero agenda, it becomes clear why investment capital, and jobs, have gone elsewhere.
The consequences reach far beyond chemical companies themselves. Chemicals are the building blocks of modern economies. As Marco Mensink, director-general of the European Chemical Industry Council, warned, “If you want a defense sector⦠an automotive sector, its totally dependent on chemicals supplying the materials.” Europe is already 80% dependent on China for vitamins, and increasingly reliant on Chinese inputs for economic essentials. This dependence leaves Europe not only economically exposed but strategically vulnerable to China for the building blocks of its economy.
For Americans, the temptation is to see this as simply a problem of Europes own making. After all, the U.S. enjoys comparatively lower energy costs, abundant natural gas, and a more market-oriented approach to industrial policy. At Olin, we see that this sense of security is more fragile than people might expect. Many of the same pressures are already visible here: rising regulatory burdens, permitting delays for industrial projects, growing reliance on , and an uneven trade playing field. Recent Biden-era EPA rules pertaining to the Toxic Substances Control Act (TSCA), particularly around risk evaluation and unreasonable risk determinations, have significantly expanded federal authority in the chemical space, adding to the regulatory burden facing companies here at home. This, in turn, has threatened the domestic production of chemicals essential to economic growth in the United States. As recent Congressional testimony highlighted, as late as 2009, the United States was the global leader in chemical production. Yet today, China accounts for 50% of all global chemical sales, with the United States a distant second place. Without deliberate action, the U.S. could follow Europe down the same path, losing investment, capaci
