The shifting landscape of Europe's plastics industry

Europe's plastics industry is facing a structural decline in global competitiveness in all segments and applications. Once a global leader, Europe's share of plastic production has steadily eroded - from 25% in 2006 to just 13% in 2023 - while China has surged ahead, now commanding over a third of global output. This shift is driven by China's state-backed industrial expansion, access to low-cost raw materials, and growing export capacity, resulting in competitively priced plastics that have increasingly found their way to global markets.

Europe, by contrast, is grappling with high energy costs, declining domestic oil production, and an increasing reliance on imports. Plant closures and capacity reductions across the continent reflect the mounting pressure on producers. Regulatory tightening, while advancing sustainability goals, adds further complexity and cost.

Trade tensions and geopolitical risks, including conflicts in the Middle East, pose additional threats to oil supply and price stability. Meanwhile, the US benefits from domestic shale gas, and China continues to import discounted Russian oil, widening the cost gap.

Despite these headwinds, plastics remain essential, particularly in packaging, where large-scale substitution is unlikely.

The EU's regulatory leadership on sustainability offers a strategic lever. However, Europe's recycling sector is under strain, with recyclates often more expensive than virgin plastics and infrastructure struggling to meet rising demand.

Looking ahead, China is expected to reach 50% of global plastics market share by 2030, while Europe may fall to 11%, increasingly becoming a net importer, according to Plastics Information Europe. To remain competitive, European producers must focus on specialization, supply chain agility, and innovation - supported by policy alignment and investment in recycling and circular systems, and, increasingly, strategic consolidation to achieve scale and strengthen market positioning.