Europe’s Petrochemical Industry Slashes Cracker Capacity in Historic Retrenchment

Europe’s petrochemical sector is undergoing an unprecedented wave of olefins capacity cuts, as producers facing sustained downturns and bleak short-term outlooks finally take drastic action. Over the past 18 months, seven steam crackers have been shut down or scheduled for closure by 2027, removing around 4.5 million tonnes per year (t/y) of ethylene capacity, 2.3 million t/y of propylene, and 430,000 t/y of butadiene, according to S&P Global Commodity Insights.

A Shrinking Industry Footprint

As closures progress, the number of operating ethylene plants in Europe is expected to fall below 50. S&P Global projects the fleet will decline to 48 by 2026 and further to 46 by 2029, down from 60 units in 2015. Total design capacity will shrink from over 26 million t/y in 2015 to just above 22 million t/y by 2029.

While Ineos’s flagship “Project One” cracker in Antwerp (1.45 million t/y, ethane-fed) will temporarily bolster capacity, the broader landscape remains grim. Weak macroeconomic conditions, fragile demand outlooks, and high energy and feedstock costs continue to erode competitiveness, leaving the fate of several other crackers uncertain.

Giants Reshape Their Portfolios

 Europe’s chemical heavyweights are now openly retreating.

• Shell and SABIC are reassessing their European portfolios, spanning four crackers in the Netherlands, Germany, and the UK with combined ethylene capacity of 2.6 million t/y. Shell CEO Wael Sawan admitted the company is intensifying its review of lossmaking chemical assets, with selective closures on the table.

• BP is seeking a buyer for its integrated refining-chemical assets in Gelsenkirchen, Germany.

• Dow will permanently close its 510,000 t/y Boehlen cracker in Germany by Q4 2027, and has idled its LCH3 unit in Terneuzen, the Netherlands. CEO Jim Fitterling confirmed the board has approved shutting three European chemical plants to reduce exposure to high-cost assets.

• TotalEnergies plans to shut its 550,000 t/y NC2 cracker in Antwerp by 2027 to address market imbalances.

• Ineos faces mounting pressure at its Grangemouth site in the UK, where 2024 energy costs were €100 million higher than comparable U.S. facilities, compounded by €30 million in carbon tax expenses.

Meanwhile, SABIC CEO Abdulrahman Al-Fageeh has openly signaled that market exits remain on the table, stressing that the pressure to cut costs is “immediate and inescapable.”

Balancing the Market, At a Cost

 Industry insiders estimate European cracker utilization currently hovers near 75%. By cutting 4.5 million t/y of ethylene capacity, utilization could recover to around 85% by 2030, restoring balance to the olefins market. However, the startup of Ineos’s Antwerp Project One will offset part of these reductions, suggesting further closures of older, less efficient units may still be required.

Structural Pain

The closures highlight Europe’s structural disadvantages. Cracker operators face energy costs and carbon taxes far higher than in the U.S. and Middle East, squeezing margins and forcing companies to retreat. What emerges is a leaner, more consolidated petrochemical sector—but one that risks ceding market share to more competitive global regions.

In short, Europe’s once-dominant cracker fleet is shrinking fast. The retrenchment may stabilize utilization rates, but it also underscores a broader reality: Europe’s petrochemical future will be defined by fewer, larger, and more efficient plants—if it is to remain viable at all.