What are basic Chemicals
Basic chemicals (also called commodity chemicals, upstream petrochemicals or building-block chemicals) are the fundamental molecules from which thousands of other chemicals and plastics are made.
| Basic chemical | Used to make |
|---|---|
| Ethylene | Polyethylene (PE), PVC, antifreeze, detergents |
| Propylene | Polypropylene (PP), acrylics, solvents |
| Butadiene | Synthetic rubber (tires) |
| Benzene | Polystyrene, nylon, detergents |
| Chlorine | PVC, water treatment, disinfectants |
| Caustic soda (sodium hydroxide) | Paper, soap, alumina, chemicals |
| Methanol | Formaldehyde, fuels, plastics |
DOW
DOW has recently announced that it will shut down and dismantle three chemicals plant in Europe.
Böhlen, Germany – Ethylene cracker
- Supplies ethylene, a key building block for plastics and chemicals.
- Planned shutdown: Q4 2027.
Schkopau, Germany – Chlor-alkali and vinyl (CAV) plant
- Produces chlorine, caustic soda and vinyl products.
- Planned shutdown: Q4 2027.
Barry, Wales (United Kingdom) – Basics siloxanes plant
- Produces silicone intermediates.
- Planned shutdown: mid-2026.
Reduced EU Basic chemicals capacity
According to Cefic’s European Chemical Closures & Investments Radar (2022–2025):
- Around 37 million tonnes/year of chemical production capacity have been announced for closure since 2022.
- This represents about 9% of total European chemical production capacity.
- Nine steam crackers are affected, corresponding to roughly 16% of European steam-cracking capacity.
- At the same time, investment in new chemical capacity has fallen sharply.
| Company | Plant / Site | Country | Status |
|---|---|---|---|
| Versalis (ENI) | Porto Marghera steam cracker | Italy | Closed (2022) |
| ExxonMobil | Port-Jérôme (Gravenchon) steam cracker | France | Closed (2024) |
| SABIC | Geleen steam cracker | Netherlands | Permanently closed (2024) |
| SABIC | Wilton olefins cracker | United Kingdom | Permanent closure announced (2025) |
| Versalis (ENI) | Brindisi steam cracker | Italy | Closing (by 2027) |
| Versalis (ENI) | Priolo steam cracker | Italy | Closing (by 2027) |
| Dow | Böhlen ethylene cracker | Germany | Closing (by Q4 2027) |
| Dow | Schkopau chlor-alkali & vinyl plant | Germany | Closing (by Q4 2027) |
| Dow | Barry basic siloxanes plant | United Kingdom | Closing (mid-2026) |
| Dow | Terneuzen steam cracker | Netherlands | Mothballed / idled (2025) |
| TotalEnergies | Antwerp steam cracker | Belgium | Closing (end-2027) |
| LyondellBasell | Berre steam cracker | France | For sale (2025) |
| LyondellBasell | Münchsmünster steam cracker | Germany | For sale (2025) |
Why are EU Basic chemicals plants shutting down?
The short answer is: because Europe has become one of the most expensive places in the world to produce basic chemicals. For commodity chemicals, producers compete primarily on cost, and Europe has lost much of its cost advantage.
The main reasons are:
- High energy costs (the biggest factor)
- Steam crackers and chlor-alkali plants consume enormous amounts of energy.
- European natural gas prices have remained around 3–4 times higher than in the US in recent years.
- Electricity prices are also significantly higher.
- High feedstock costs
- European crackers mainly use naphtha, derived from crude oil.
- US producers often use ethane from cheap shale gas, giving them a structural cost advantage.
- Middle Eastern producers also benefit from low-cost feedstocks.
- Chinese overcapacity
- China has built many new, world-scale petrochemical plants over the last decade.
- Domestic demand has not grown as quickly as expected, so excess production is exported, increasing price pressure worldwide.
- Weak European demand
- Construction, automotive and manufacturing have been relatively weak, reducing demand for plastics and basic chemicals.
- Many European plants have been operating well below optimal utilisation rates.
- Older plants
- Many European crackers were built in the 1960s–1980s.
- They are generally smaller and less efficient than newer facilities in the US, China and the Middle East.
- Higher regulatory and environmental costs
- European producers face costs related to emissions, permitting and environmental compliance.
- Industry groups argue these add to the competitiveness gap, although they are generally considered secondary to the energy disadvantage.
PERSONAL REMARKS
EU institutions are not promoting the creation of jobs. In the contrary, their little ridiculous rules are discouraging businesses to invest in Europe.