The European chemical industry is the second largest chemicals market in the world, utilizing approximately 70% of its production within Europe. Beyond this, it also caters to the most advanced applications and demanding customers by delivering intelligent, efficient, problem-solving, and increasingly sustainable products and services. Through this approach, the industry has cultivated a strong emphasis on performance and innovation. Coupled with a collaborative ecosystem of value chain and innovation partners, it continuously pushes the boundaries of what modern chemicals and materials can achieve. 

3+6 – The formula for success

In its latest outlook, Deloitte introduces the "3+6" framework, which outlines where, why and how the European Industry will thrive. This framework highlights three key strengths that underpin the industry's resilience and identifies six promising segments poised for growth, regionally and globally. Together, these elements paint a positive picture of the industry's future, standing in stark contrast to the popular doomsday scenarios of today.

Three key strengths of European chemicals

• Strong Home Markets: Europe remains the second largest chemical market globally, not only in terms of volume but also quality-wise. It is characterized by applications and customers that demand and value high-end products and services.
• Integrated Chemical Parks: Europe is home to over 60 chemical parks that provide efficient and integrated production setups. They enable the joint use of utilities and services while optimizing the flow of by-products and intermediates across value chains.
• Collaboration: Europe is globally renowned for its close and effective collaboration between industry and academia. This partnership drives solution-oriented innovation in future-critical sectors like sustainability, circularity and bio-based chemistry. 
  

Who will benefit? 

Deloitte identified six particularly attractive segments within the chemical industry that will benefit the most:

Do mega-trends change the picture? 

No, just the opposite. Global mega-trends such as sustainability and circularity are rein-forcing the chemical industry’s strengths. The global sustainability trend is undisputed and without alternative, and will continue to drive demand for products, services and technologies where the European chemical industry leads the way globally. Additionally, sustainability/circularity and increasing awareness of required geopolitical resilience will drive local supply chains and promote European solutions. This has also been stated prominently by the European commission that declares the chemical industry as one of the system-critical ones within a “Europe-for-Europe” strategy.

Outlook: navigating challenges while building on strengths

So is everything perfect? While the outlook is largely positive, the industry is not without its challenges. Painful adjustments, particularly in commodity chemicals, are evident in recent closures and divestments in the naphtha cracker and polyolefin asset base. Regional demand weakness, high energy costs and burdening regulation remain valid concerns. Ongoing initiatives like the European Commission’s Clean Industrial Deal and the Antwerp Declaration for a European Industrial Deal address these critical issues, however, their tangible benefits for the chemical industry are yet to be realized. So not everything is perfect.

However, there is reason to remain positive: Non-EU buyers have invested more than 30 bn EUR in EU chemicals operations over the last years, despite global disruptions. They have extended their geographical footprint and diversified their portfolio. This underscores the trust in European markets and the appeal of European chemicals globally.

Now is the time to show trust and confidence in the European chemical industry. By actively recollecting their strengths and building on them, the industry is well-positioned to embrace a prosperous future. 

Download Deloitte’s full outlook, “Future of the European chemicals industry”, to gain further insights into the opportunities and strategies shaping the industry’s path forward.