IGBCE warns of “chaotic deindustrialisation” in European basic chemicals

Hanover, Germany – German trade union IGBCE has warned against ‘uncontrolled capacity cuts’ in Europe’s basic chemicals sector, cautioning that uncoordinated closures risk “the loss of entire industrial clusters” and could trigger “chaotic deindustrialisation”.

Speaking at the union’s annual press conference 13 March, chairman Michael Vassiliadis said there was a danger of increasing market concentration “with a tendency towards monopolisation”.

He called for a politically managed approach to restructuring, urging Berlin to take the lead.

“We appeal to the German chancellor to champion this in Europe and simultaneously push for it at home,” he said.

For reference, Vassiliadis pointed to Japan and South Korea as examples where “orderly downsizing on the one hand and smart expansion on the other go hand in hand.”

According to the German trade union, basic chemicals production, typically carried out in energy-intensive, large-scale plants, underpins integrated chemical sites.

The closure of such units, it noted, can disrupt “entire value chains”, as downstream facilities depend on a steady supply of intermediates.

“A cracker closure can jeopardise countless companies and thousands of jobs in the immediate vicinity,” Vassiliadis said, pointing to Dow’s plan to take a cracker offline in eastern Germany by end of 2027 as a current example.

According to the union chief, across Europe, producers are considering similar cuts amid an estimated 20% overcapacity in basic chemicals, driven by a weaker global economic environment.

The union said such decisions are being taken on commercial grounds alone, without regard for the wider impact on chemical parks, employment and supply chains.

Such moves “ultimately [impact] the resilience and independence of the chemical industry as a whole.”

At the same time, Vassiliadis said, “there is a risk of the market becoming concentrated in the hands of very few suppliers.”

The IGBCE, therefore, said it was advocating a “concerted consolidation” process to identify and safeguard essential capacities and strategic sites.

“We cannot save all jobs, but we must prevent an uncontrolled conflagration. And we want to create a future for every single person,” Vassiliadis said.

The union also called for urgent action on energy and emissions costs, which it described as key competitive disadvantages for European energy-intensive industries.

It said the planned industrial electricity price must deliver “tangible relief”, while emissions trading rules should be revised to extend free allowances.

In return, companies benefiting from such measures should commit to investing in climate-friendly upgrades and job security.