For decades, Europe’s plastics industry was a global powerhouse, supplying the material backbone for everything from cars and packaging to healthcare and construction. Today, it is struggling to stay afloat. Production is collapsing, petrochemical giants are shutting plants, and policymakers continue to add regulatory pressure. All while competitors in Asia and the Middle East expand aggressively. What was once an engine of Europe’s industrial base is now in undeniable structural decline.

In 2023, European plastics output dropped by more than 8% to just 54 million tonnes (including virgin, recycled, bio) EU27+3. That marks a decline of roughly 20% compared with 2006 levels, while the region’s share of the global market has slipped from 22% to barely 12% today. The problem is not a lack of global demand, indeed plastics consumption is rising worldwide, but a regional competitiveness crisis.

European producers are trapped between high energy costs, weak domestic consumption, and relentless imports of cheaper material. For many, especially in polyethylene and polypropylene, margins have turned negative.

This is not a temporary downturn, it is structural. Energy costs in Europe are still four to five times higher than in the U.S. Regulation is tightening, while imports from countries with weaker environmental standards undercut European producers on price. The industry is asked to decarbonise faster than almost anywhere else in the world, but the costs of that transformation are borne in a marketplace that does not reward it.

The consequences are visible. Dow has announced closures in Germany and the U.K., cutting hundreds of jobs. ExxonMobil, Sabic, LyondellBasell, and Versalis amongst others are reassessing their European footprints, with several openly considering asset sales. Each plant closure is a symptom of the same disease, and Europe is becoming uncompetitive as a production base for basic plastics.

The irony is bitter. Europe is importing more plastic than ever, often of lower quality and with less sustainable production standards. In effect, the continent is outsourcing its emissions while hollowing out its industrial core. And yet policymakers seem content to layer regulation on top of regulation. The upcoming Packaging and Packaging Waste Regulation (PPWR) is a prime example: ambitious targets are set for recycled content, but without a secure supply of recyclate at scale, it becomes an empty gesture.

Still, there are glimmers of opportunity. While commodity plastics like PE and PP are under intense pressure, there may be potential in niche, higher-value segments where Europe can leverage its technological and regulatory edge. Engineering plastics for electric vehicles and lightweight components, medical-grade polymers for healthcare, and polymers for hydrogen infrastructure all represent areas where Europe can compete, not necessarily on cost, but on innovation and quality. Speciality markets such as these have the potential to offer growth, if supported properly.

The question is whether Europe will seize these opportunities or continue to drift. Without serious intervention on energy policy, innovation support, and the creation of a functioning internal market for recycled and bio-based materials, the decline will accelerate. Europe will become a permanent importer in an industry it once defined.

The story of plastics in Europe is no longer about growth; it is about survival. But survival does not have to mean surrender. If Europe focuses on its strengths, backs niche markets with real industrial policy, and aligns regulation with reality, the sector can find a new role in the global landscape. The alternative is clear: a slow slide into irrelevance, with others supplying the world’s plastics while Europe talks itself out of the game.