French Chemical Industry Faces Decline Production to Fall Below 75 Percent Capacity in 2025

The French Chemical Federation reports that after a 0.3% decline in chemical production in 2024, the industry is projected to shrink further in 2025. Rising energy costs, complex EU regulations, and heavy tax burdens are intensifying challenges for the sector.

In 2024, the industry operated at only 75% capacity, below the 80% profitability threshold, leading to a 5% drop in sales to €102 billion and a 15% reduction in investment. Despite being France's largest export sector, with €79 billion in exports, production across key segments declined significantly compared to 2019: mineral chemicals (-17.7%), organic chemicals (-16.3%), and soap and fragrance products (-2.5%). Overall chemical production fell 9.3%, excluding fine chemicals.

While the EU chemical industry grew by 2% in 2024, France lagged behind due to changing global trade dynamics. The sector has also suffered from job losses as competition from Asia intensifies. Frédéric Gauchet, President of the French Chemical Federation, stressed the need to safeguard the domestic chemical industry, which supports innovation across other sectors.

The Federation has urged a comprehensive action plan at both national and EU levels, emphasizing lower energy costs, simplified regulations, and reduced industrial taxes. Investments in modernization, decarbonization technologies, R&D, and new markets are also critical to revitalizing the industry.