European plastics makers shut vegetation as manufacturing declines sharply

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European plastics producers are closing vegetation amid a deep decline in manufacturing as EU firms wrestle to compete with a worldwide glut of low-cost materials.

Plastic manufacturing in Europe declined 8.3 per cent in 2023, in accordance with figures revealed 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 stated.

The drop was deeper than anticipated, stated 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 accountable for 60 per cent of petrochemical capability will increase in 2023, in accordance with information 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 12 months, the info confirmed.

Bold local weather targets set through the European Fee’s earlier time period, which ended with EU-wide elections in June this 12 months, have spawned a wave of regulation that firms have complained is strangling progress.

In a report on European competitiveness revealed in September, former European Central Financial institution president Mario Draghi attributed a lot of the blame for the EU’s flagging financial progress to excessive power costs, “restrictive” laws and decrease price 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, stated that the “downward trend in the European plastics recycling market is alarming” and was “driving many recycling companies out of business”.

Firms together with power main ExxonMobil and chemical compounds firm Sabic have stated this 12 months that they might shut petrochemicals vegetation in Europe. Chemical compounds companies LyondellBasell, Versalis and Trinseo have stated they might evaluate or shut services.

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

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

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

Ingram added that whereas demand for brand 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 stated, including: “It’s completely counterproductive.”

Janssens stated the business needed targets for recycled content material in the whole lot 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 stated.