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EU plastics industry faces major competitiveness crisis

Phil Black - PII Editor 23/10/2025

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The European plastics industry is facing a serious crisis in competitiveness.

Recent data from Plastics – the Fast Facts 2025 highlights a significant and ongoing decline in Europe’s plastics manufacturing sector. The region is grappling with soaring costs, dwindling revenues, and a lack of progress towards a circular economy.

While production volumes saw a slight uptick in 2024—growing by a mere 0.4% to reach 54.6 million tonnes after a steep 7.6% drop in 2023—Europe's share of the global market continues to shrink, plummeting from 22% in 2006 to just 12% in 2024. Industry revenues have taken a hit as well, dropping from €457 billion in 2022 to €398 billion in 2024, marking a 13% decline.

In stark contrast, other regions are thriving: global plastics production rose by 4.1% in 2024 and has increased by 16.3% since 2018, with Asia now making up 57.2% of total output. China alone accounts for 34.5% of global plastics production—nearly three times what the EU produces.

Immediate action is crucial to protect competitiveness

Benny Mermans, President of Plastics Europe, emphasized that the industry is at a “pivotal moment”:

“While innovation and investment are surging in other parts of the world, Europe is experiencing declining turnover and sluggish production. We urgently need political support to regain our competitiveness, attract investment, and ensure resilient supply chains. Europe must take action now to safeguard its plastics industry and the many strategic sectors that rely on it.”

European plastics manufacturers are feeling the pressure from high energy costs, climate-related taxes, and rising feedstock prices, leading to asset sales, plant closures, and reduced production.

Although the EU’s trade balance in plastic polymers showed a slight improvement—from –0.8 million tonnes in 2023 to –0.2 million tonnes in 2024, aided by a 10% increase in exports—shifting global tariff regimes still present significant challenges. The United States remains Europe’s largest source of polymer imports, holding an 18.9% market share, and is the fourth-largest export market at 7.7%.

Europe's shift towards a circular economy is losing steam, and Virginia Janssens, the Managing Director of Plastics Europe, has raised some serious concerns. She warns that the region's industrial foundation is “at a cliff edge” as competitiveness takes a nosedive.

“Plastics are crucial for Europe's industrial strength and innovation. We need to keep local production alive to avoid becoming overly dependent on imports and to safeguard our security. The European Commission must act quickly to decide if it wants to take the lead in circular plastics or face the risk of further deindustrialization. The Clean Industrial Deal needs to be put into action without delay.”

Plastics Europe is urging immediate action from both the EU and national governments to:

Tackle Europe's energy cost crisis;
Enforce EU border regulations more effectively;
Encourage investment in circular plastics manufacturing; and
Boost market demand with ambitious recycled-content targets and financial incentives.

Additionally, the organization has suggested setting up a Chemicals and Plastics Trade Observatory to keep an eye on global trade flows in real time, allowing for quick responses to trade challenges.

Europe, once a frontrunner in circular plastics, is now being outpaced by China and other Asian countries. In 2024, circular plastics made up just 15.4% of the EU's production, which actually reflects an 18.9% drop in fossil-based output since 2018, rather than any significant boost in recycling efforts.

The EU's output of circular plastics remained stagnant at 8.4 million tonnes in 2024. Mechanical recycling saw a slight increase of 2.7%, reaching 7.7 million tonnes, while chemical recycling stayed the same at 0.11 million tonnes. Unfortunately, bio-based plastics took a hit, dropping 25% to 0.6 million tonnes due to competition for feedstock from subsidized biofuels.

In contrast, global production of circular plastics skyrocketed to 43.9 million tonnes, marking the first time it surpassed 10% of total global output. China alone contributed 13.4 million tonnes, nearly doubling Europe's total.

Janssens pointed out:

“Europe’s circular transition is stalling without clear, consistent policy backing. All recycling technologies must be supported alongside strong market-pull mechanisms to create the scale needed for competitiveness. Our Plastics Transition roadmap shows that a net-zero, circular plastics system is within reach—but only if Europe maintains a robust and competitive plastics sector today.”