European plastics makers shut crops as manufacturing declines sharply

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European plastics producers are closing crops amid a deep decline in manufacturing as EU corporations battle to compete with a world glut of low cost materials.

Plastic manufacturing in Europe declined 8.3 per cent in 2023, in keeping with figures printed by Plastics Europe, the business physique, on Monday. Mechanical plastics recycling — the commonest type of plastic recycling in Europe — has additionally declined for the primary time since 2018 due to a drop in demand, Plastics Europe mentioned.

The drop was deeper than anticipated, mentioned Virginia Janssens, managing director of Plastics Europe, including to considerations amongst energy-intensive industries about “deindustrialisation in Europe” resulting in a heavier reliance on “less sustainable imports”. Germany is the continent’s largest plastics producer.

The autumn in Europe contrasts with a 3.4 per cent improve globally as nations together with China and the US scale up plastics manufacturing. China was answerable for 60 per cent of petrochemical capability will increase in 2023, in keeping with knowledge supplier S&P International.

The European plastic business’s share of the worldwide market has declined from 28 per cent in 2006 to 12 per cent final yr, the information confirmed.

Bold local weather targets set throughout the European Fee’s earlier time period, which ended with EU-wide elections in June this yr, have spawned a wave of regulation that corporations have complained is strangling development.

In a report on European competitiveness printed in September, former European Central Financial institution president Mario Draghi attributed a lot of the blame for the EU’s flagging financial development to excessive vitality costs, “restrictive” rules and decrease value manufacturing overseas.

The glut of virgin plastic exterior Europe has additionally undermined the enterprise case for recycled materials.

Final month Plastics Recyclers Europe, an business physique, mentioned that the “downward trend in the European plastics recycling market is alarming” and was “driving many recycling companies out of business”.

Firms together with vitality main ExxonMobil and chemical substances firm Sabic have mentioned this yr that they might shut petrochemicals crops in Europe. Chemical compounds companies LyondellBasell, Versalis and Trinseo have mentioned they might overview or shut amenities.

Rob Ingram, chief government of Ineos’s enterprise making olefins — hydrocarbons used as a uncooked materials for chemical and polymer merchandise — mentioned Europe’s bureaucratic and regulatory burden was a “self-inflicted wound”.

With out new funding in Europe, producers wouldn’t be capable to fund the transition to extra sustainable manufacturing, he mentioned.

“A lot of our competitors have either closed or announced strategic reviews of European assets,” he mentioned. “If everyone packs up shop and goes elsewhere, we’re not going to have a [green] transition.”

Ingram added that whereas demand for brand spanking new plastics was sustained in Europe, funding in new capability was as an alternative flowing to the US and Asia.

“Instead of them being made in Europe, where we have fairly stringent environmental control . . . these materials may be produced elsewhere . . . or shipped halfway around the world to be consumed here,” he mentioned, including: “It’s completely counterproductive.”

Janssens mentioned the business wished targets for recycled content material in every little thing from packaging to electrical autos “because that will drive demand for circular plastics and that will help us”.

“We also are calling upon policymakers for some urgent [help] — whether it’s into fiscal or economic measures — to see what they can do to really increase that business case for circular plastics investments in Europe,” she mentioned.