European Plastics Industry Faces Crisis as Global Competitiveness Erodes

The European plastics industry is facing a critical downturn, according to the latest annual report from Plastics Europe, released on 8 October. The report highlights a dramatic erosion of competitiveness, plunging market share, and falling sales, with sustainability efforts stalling.

The data reveals a sharp decline in Europe's share of the global plastics market. In 2006, the region accounted for 22% of global plastic production. By 2024, this share is expected to have shrunk to just 12%. Over the past three years, sales have seen a significant drop from €457 billion in 2022 to €398 billion in 2024, a reduction of €59 billion, or 13%. This sharp decline stands in stark contrast to the growth seen in other regions. Global plastic production rose by 4.1% last year, with cumulative growth of 16.3% since 2018. The report underscores that Asia now dominates the global market, contributing 57.2% of global plastic production, with China alone accounting for 34.5%-nearly three times the output of the entire European Union.

Bennie Melmans‌, President of Plastics Europe, commented on the industry's struggles: 'The European plastics industry stands at a critical juncture. While innovation and investment activities accelerate on other continents, Europe faces declining sales and slowing production rates.'

The downturn is attributed to several challenges, including rising energy costs, climate-related levies, and soaring raw material prices, which are all undermining the sector's competitiveness. As a result, European manufacturers are accelerating asset disposals and halting production. Nevertheless, there was a slight improvement in the EU's plastic polymer trade deficit in 2024, which fell from 8 million tonnes in 2023 to 2 million tonnes, largely due to a 10% increase in exports.

The report also highlights the significant risks posed by fluctuating tariffs, with the United States remaining the EU's largest source of plastic polymer imports, accounting for 18.9% of the total. At the same time, the US is also the fourth-largest export market for EU plastic products, absorbing 7.7% of total exports.

Once a leader in the plastics circular economy, Europe has now been overtaken by China and other Asian nations. In 2024, recycled plastics are expected to make up only 15.4% of the EU's total plastic production, or 8.4 million tonnes. Of this, mechanical recycling increased by just 2.7% to 7.7 million tonnes, while chemical recycling stagnated at 1.1 million tonnes. In contrast, global recycled plastic output surged to 43.9 million tonnes in 2024, now exceeding 10% of global plastic production for the first time.

Virginia Janssens, Director General of Plastics Europe, emphasised: 'Plastics remain a critical material underpinning Europe's industrial resilience, innovation and competitiveness. Maintaining sufficient local production avoids excessive external dependency and strengthens Europe's security. The European plastics industry is teetering on the brink, with competitiveness collapsing. The European Commission and EU Member States must sound the alarm.'

Melmans‌ urged that the plastics industry urgently requires support and policy safeguards from European governments to reignite investment enthusiasm and establish resilient, competitive supply chains. Europe must act immediately-swift and decisive measures are essential to securing the future of its local plastics sector.