The global chemical industry thrives on balanced, competitive regional production hubs. When any major region faces structural disadvantages, it creates ripple effects across the entire value chain, from supply disruptions to innovation slowdowns. Europe's current challenges illustrate this dynamic. Recent data shows a significant global shift in plastics production: Asia now accounts for 57.2 % of the world’s plastics output, while Europe’s share has eroded from about 22 % in 2006 to roughly 12 % in 2024. This reflects a broader competitiveness challenge that demands immediate, coordinated attention from the European industry and policymakers alike.
Imbalances in regional production can tighten global supply, drive price volatility, and create innovation gaps that affect the entire value chain. As production moves away from a region like Europe, the industry becomes increasingly dependent on imports from regions with lower production costs, such as China. This dynamic, coupled with complex regulations and higher energy costs in a certain region, amplifies the challenges facing the global market. The issue isn’t just the viability of any single region’s industrial base; it’s whether industry leaders across the globe can act decisively to create the conditions that allow the entire value chain to thrive.
The Competitiveness Gap
Global chemical manufacturers face mounting economic pressures that have been compounded in recent years. These pressures are structural and multifaceted. Over the past decade, substantial new production capacity has been added in the Asia-Pacific region, with many facilities built to modern, large-scale specifications that benefit from integrated supply chains, competitive energy and labor costs, and, in some cases, direct or indirect state support. In parallel, manufacturers operating in other regions face more constrained conditions for investment and asset renewal. As these structural differences widen, energy- and capital-intensive production becomes increasingly difficult to sustain in higher-cost environments, influencing investment decisions and production footprints.
Regulatory complexity adds another layer of challenge. Across different regions, varying compliance requirements, permit procedures and reporting standards create fragmentation in the global value chain. In Europe, for example, the lack of regulatory harmonization between member states leads to administrative bottlenecks that consume valuable resources without delivering proportional value. A permit process that takes months in one region might take years in another, delaying critical infrastructure investments and innovation projects that are necessary for maintaining global competitiveness. The focus must be on creating efficient, harmonized systems that achieve regulatory objectives without inadvertently hindering the very industries that underpin global supply chains.
The Case for Harmonization
Addressing these challenges requires practical solutions focused on streamlining processes while maintaining high standards. The EU Omnibus Simplification Package, having reached a provisional agreement in the European Parliament in December 2025, represents progress toward reducing administrative complexity and reporting burdens for manufacturers by simplifying and aligning requirements across multiple legislative frameworks. Rather than revisiting policy objectives, the Omnibus focuses on implementation: introducing clearer thresholds, reducing duplication and improving consistency to make compliance more efficient without undermining accountability or global industrial competitiveness. Despite this positive step, more work is needed. Plastics Europe, an organization I am proud to sit on the Steering Board of, has called for similar frameworks across permitting and compliance.
When manufacturers can rely on consistent regulatory requirements across regions, they can allocate resources toward innovation rather than administrative navigation. Further assessments of the proposed regulations and a close examination of their real-world impact on manufacturers' ability to compete globally are necessary to confirm whether these new policies will achieve the intended outcomes without creating unintended consequences for the global supply chain.
Investment and Collaboration
The global chemical industry relies on a vast, interconnected workforce across regions. In Europe alone, the chemical industry employs 1.2 million people across 31,000 companies, supplying critical materials to downstream sectors from automotive to construction to healthcare. These jobs and capabilities matter not just to Europe, but to global customers who rely on diverse, resilient supply chains. The path forward, for Europe and other regions facing competitiveness pressures, requires coordinated action: harmonizing regulations, addressing energy competitiveness, and fostering meaningful collaboration between industry and policymakers. When regions can compete on innovation and efficiency rather than being disadvantaged by structural barriers, the entire industry benefits. The window for these decisions is narrowing, but with the right frameworks, the global chemical industry can maintain the regional balance that drives resilience, innovation, and long-term growth.
