The petrochemicals industry is a substantial contributor to Europe’s economic development and represents over 27.1% of the European chemical industry turnover which generates €649 billion in sales in Europe (as of 2014).
A major global player, the European chemical industry in 2014 accounted for 20.0% of the world’s chemical sales that grew in 2014 by 2.6 % from €3,151 billion in 2013 to €3,232 in 2013. Formed of 29,000 companies, 96% of which are small to medium sized enterprises, it employs 1.16 million people.
As one of Europe’s leading manufacturing sectors, the chemical sector competes on a global stage and requires constant investment and innovation to remain competitive. Although the value of the EU’s chemical production has consistently risen, its market share has decreased as other markets, notably the developing world, step up their own domestic chemical production.
The petrochemical sector underpins much of European manufacturing as it is an important source of materials for downstream industries using polymers and synthetic rubbers to produce many everyday consumer products. Such products also are used by many other industries as vital resources for production, for example, in manufacturing light-weight automobile parts which in turn helps to conserve energy every time a car is run.
A vital link in the EU’s economic value chain
There are a vast number of products relying on petrochemicals which are impossible to quantify but which are essential components in society today. A tyre may be worth a lot less than a car, but without a tyre, the car cannot drive. This scenario is multiplied many times over when all the various products made with petrochemicals are considered.
The petrochemical sector plays an important role in Europe’s economic value chain with over 79% of global chemical sales occurring within Europe. There is an integrated relationship whereby manufacturing sources its chemical materials locally and the chemical industry serves a home market. Should one or the other of these move out of the EU, it is very likely that the other would follow giving other markets added impetus to invest and develop their own chemical industries to supply their domestic manufacturing demand. Such a potential loss of demand for European chemicals would undoubtedly impact the development of the sector and affect the number of jobs it provides. Similarly the loss of the manufacturing industry would result in further job loss. Combined, such a result would have a hugely detrimental impact upon the EU’s economy.
In an interview with global information provider Platts, Dorothee Arns talks about the strengths and weaknesses of the petrochemicals industry in Europe. Listen here to the Platts Petrochemicals Focus (February 2015).