Global chemical giant Dow Chemical announced on July 7 that it has officially approved the closure of three upstream chemical plants in Germany and the United Kingdom, resulting in approximately 800 job cuts.
The shutdown operations are set to begin in mid-2026, with completion expected by the end of 2027, and equipment dismantling potentially extending through 2029.
These plant closures are part of Dow's global restructuring plan announced in January of this year, which involves approximately 1,500 layoffs worldwide and targets $1 billion in cost reductions.
Böhlen, Schkopau, Barry: Timelines for the Three Plant Closures
The three facilities slated for closure are located in Böhlen, Saxony; Schkopau, Saxony-Anhalt; and Barry, Wales, in the UK.
The Böhlen plant primarily produces basic chemicals for packaging and specialty plastics, with an annual ethylene capacity of 510,000 tons, propylene 250,000 tons, and butadiene 105,000 tons. It is scheduled to close in the fourth quarter of 2027.
The Schkopau plant focuses on industrial intermediates and infrastructure, with annual capacities of 250,000 tons of chlorine, 275,000 tons of caustic soda, 740,000 tons of EDC, and 390,000 tons of VCM. It will also close in Q4 2027.
The Barry plant produces basic siloxanes for performance materials and coatings, with an annual capacity of 145,000 tons, representing 30.5% of total European capacity. Its closure is scheduled earlier, for mid-2026.
Europe Under Pressure: Energy Bills and Asian Competition
Dow Chairman and CEO Jim Fitterling attributed the pullback to three inescapable realities: After the Russia-Ukraine conflict, European natural gas prices surged, erasing the energy cost advantage essential to chemical production. Demand in core downstream sectors such as automotive, home appliances, and construction has remained persistently weak, with orders declining year after year.
Meanwhile, manufacturers from China, South Korea, and the Middle East, leveraging lower production costs and complete industrial chains, have been exporting large volumes of basic chemicals and intermediates to Europe, leaving local producers losing ground in price competition.
Since 2024, Dow has already closed its polyether polyols plant in Argentina and its alkoxylation plant in the Nangang Industrial Park in Taiwan, China, and has sold its soft packaging adhesives business.
Peers Retreat in Droves: Large-Scale Capacity Withdrawal from European Chemicals
Since 2025, eight major chemical giants—Lanxess, Shell, Mitsubishi Chemical, Huntsman, Covestro, LyondellBasell, INEOS, and Teijin—have successively announced plant closures or divestitures of European operations.
According to the European Chemical Industry Council (Cefic) report released in January 2026, from 2022 to 2025, the European chemical industry cumulatively permanently shut down 37 million tons of capacity, accounting for 9% of total European capacity, with the shutdown rate surging sixfold compared to the historical norm. In 2025 alone, 17.2 million tons were closed, exceeding the combined total for 2022 and 2023.
Over the four-year period, Germany led with 8.8 million tons of closures, representing 25% of Europe's total; the Netherlands followed with 7.2 million tons (20%); and the UK with 4.5 million tons (12%).
The upstream petrochemical sector suffered the heaviest losses, with 17.8 million tons of closed capacity accounting for 48% of the total, and steam cracker capacity reduced by 16%. About 60% of Europe's oil refineries are now at high risk of closure.
Costs and Returns of the Shutdowns
Dow expects to record charges of $630 million to $790 million related to the closures, covering asset write-downs, write-offs, disposals, and severance expenses, with cash outlays of approximately $500 million over the next four years.
The company anticipates that operating EBITDA will gradually improve from 2026 onward, reaching 50% of the targeted $200 million improvement by the end of 2027, with full achievement by 2029.
Who Is Filling the Capacity Gap Left by Europe?
While Dow retrenches in Europe, newly built production capacity in Asia and the Middle East is filling the gap.
Integrated petrochemical facilities in the Middle East and Asia enjoy a comprehensive production cost advantage of $180 to $220 per ton of ethylene compared to Europe's standalone cracker units.
Cefic reiterated on July 7 that without substantial adjustments to the emissions trading system reform and natural gas pricing mechanisms, the trend of European chemical capacity closures is likely to continue beyond 2027.
