The European Plastics Crisis: Declining Competitiveness, Plant Closures, and Threats to the Green Transition Amid Rising Imports from the US, China, and the Middle East

By Marco Arezio

The plastics sector in Europe is undergoing a profound and multifaceted crisis, extending from production to recycling capabilities, jeopardizing not only the continent's competitiveness but also its ambitious ecological transition objectives.

This is the stark reality revealed by the latest data from Plastics Europe, the industry association, which highlights an increasingly alarming scenario for both the industrial and environmental aspects of the sector.

Declining Production: The End of an Era?

In 2023, plastics production in Europe experienced a significant drop, down 8.3% from the previous year. This unprecedented decline marks a return to production levels seen more than a decade ago.

While nearly 59 million tons were produced in 2022, the total fell to 54 million tons in 2023, including 42.9 million tons of virgin plastic derived from fossil fuels.

Even recycled plastic, a cornerstone of Europe's circular economy model, has shown signs of distress.

Mechanically recycled secondary plastic production fell by 7.8%, stopping at 7.1 million tons. This marks the first contraction since 2018, a sign of a slowdown that puts the entire European circularity system at risk.

Chemical recycling, considered one of the most promising paths for the future, remains negligible, with just 120,000 tons produced in 2023. Bioplastics, while growing, are still a marginal part of the market, increasing from 700,000 to 800,000 tons.

Competitiveness in Decline: A Continent Losing Ground

Despite the global plastics market recording a 3.4% increase in 2023, growing from 400 to 413 million tons, Europe's share continues to shrink. From 28% in 2006, Europe now accounts for just 12% of global production.

This reduction in industrial competitiveness is tied to structural factors such as high energy and labor costs, as well as external factors like competition from the US, the Middle East, and China.

Trade data reveals an increasingly negative balance: while Europe still boasts a trade surplus of €12.7 billion in terms of value, it has become a net importer of resins since 2022 and finished products since 2021.

Between 2020 and 2023, EU resin exports plummeted by 25.4%, further increasing dependence on imports.

Deindustrialization and Plant Closures

The erosion of competitiveness is already leading to significant plant closures across Europe. Among the affected companies are international giants such as ExxonMobil and Sabic, as well as the Italian company Versalis, controlled by Eni.

Versalis has announced the closure of cracking plants in Brindisi and Priolo and polyethylene production in Ragusa, citing a transformation plan focused on decarbonization and reducing economic losses.

This trend is not limited to the basic chemicals sector but also affects polymers, which are increasingly fragmented or acquired by foreign groups. A notable example is Covestro, the German giant recently purchased by the Emirati company Adnoc for €14.7 billion.

Dependence on Imports: A Threat to the Green Transition

The plastics industry in Europe employs over 1.5 million people across approximately 51,700 companies, generating a turnover of €365 billion. However, declining domestic production and growing reliance on imports threaten both employment and investment.

Dependence on imports is not just an economic issue but also an environmental one.

Imports from countries such as China, the US, and the Middle East often fail to meet European standards for sustainability and safety.

This could undermine efforts to achieve the goals outlined in the Plastics Transition Roadmap, which calls for a rapid increase in circularity rates.

To date, plastic from recycling accounts for only 14.8% of total European production, with a 0.7% increase from 2022, a pace insufficient to meet Europe’s ambitions.

Conclusions

The plastics crisis in Europe is a wake-up call not only for the industry but for the continent's entire economic and environmental system. Declining competitiveness, combined with growing dependence on imports, raises questions about Europe’s ability to lead the transition to a sustainable and circular model.

Structural interventions are urgently needed to reverse this trend, from adopting more investment-friendly industrial policies to promoting advanced recycling technologies.

Without decisive action, Europe risks losing not only one of its key industries but also its credibility as a global leader in the green transition.

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