Europe’s chemical industry is facing a mixed outlook, marked by cautious optimism from some producers and deep concern from others. Lanxess CEO Matthias Zachert expects the sector to begin a gradual recovery in 2026, supported largely by Germany’s substantial new fiscal measures. A €500 billion infrastructure fund and €46 billion in tax relief are anticipated to lift demand for specialty chemicals used in construction, industrial infrastructure, and coatings. Zachert notes that tariff uncertainty should ease compared with 2025, describing the environment as stabilizing rather than worsening. Still, he warns that the economic boost will take time to materialize, as infrastructure funding must filter through multiple levels of government before translating into real chemical demand.
In sharp contrast, INEOS Inovyn is warning that Europe’s chemical industry is reaching a breaking point. The company plans to shut down two major production units in Rheinberg, Germany, resulting in the loss of 175 jobs. INEOS cites unsustainably high energy and carbon costs, as well as a lack of adequate trade protection against low-cost imports. The closures include an allylics unit that produces materials essential for epoxy resins used in aerospace, automotive, and renewable-energy applications, along with an electrochemical plant that makes chlorine vital for water treatment and pharmaceuticals. Company leadership argues that European policy has left domestic producers at a severe disadvantage compared to competitors in the U.S. and China, who face lower energy costs and stronger industrial support. INEOS is urging European governments to intervene to preserve remaining operations and prevent further erosion of the region’s chemical manufacturing base.
Together, the two developments illustrate a sector torn between long-term policy-driven optimism and immediate structural pressures.
https://www.reuters.com/business/lanxess-ceo-sees-gradual-recovery-chemical-industry-2026-2025-11-06/
https://www.hydrocarbonprocessing.com/news/2025/10/ineos-to-close-two-rheinberg-plants-as-europe-s-chemical-industry-hits-breaking-point/
