As Europe’s chemicals industry faces unprecedented competitive pressure, Rob Ingram is a vocal defender, calling for decisive political action before it’s too late. During ESF Europe 2026 in Antwerp, Rob sat down in an exclusive fireside chat to discuss the scale of the challenge and the urgent action needed to safeguard Europe’s industrial backbone, and why INEOS continues to invest in Europe.
Top 5 Headline Takeaways
- Europe's chemical industry is not disappearing, but it is fundamentally transforming - Demand for petrochemicals will continue to grow, yet Europe's industry will look very different in the future, with fewer assets, greater consolidation and a stronger focus on competitiveness and value creation.
- Global competitiveness has become Europe's defining challenge - China's unprecedented capacity expansion, the US feedstock and energy advantage, high European energy costs, CO₂ costs and regulatory burdens have fundamentally altered the competitive landscape for European industry.
- Europe needs a new industrial strategy, not just climate ambition - Decarbonisation remains the right objective, but competitiveness must be the engine that enables investment, innovation and sustainability. Europe needs policies that support both industrial resilience and climate goals.
- European production still matters - Europe cannot rely solely on imports or survive exclusively on speciality products. A healthy industrial ecosystem requires both high-value differentiated products and a strong domestic manufacturing foundation to support supply chains, innovation and strategic autonomy.
- Europe's future remains in its own hands - Many of today's challenges are the result of policy choices. That means solutions are also within Europe's control. Industry and policymakers must now move from discussion to action to secure a competitive, sustainable and strategically important chemical industry for the future.
Full Takeaways
Cefic has published a rather pessimistic report. Why is the European chemical industry in such a crisis?
Our industry is facing significant disruption and transformation. Multiple economic, geopolitical and market challenges are accelerating structural change, and as a consequence, the industry will no longer operate in the same way it has historically.
However, fundamentally, the materials we produce are essential to our way of life and are strategically important to national and global economies. Demand for these products is not disappearing; in fact, long-term global demand for essential materials is expected to continue growing.
The US’s bet on investing heavily in new capacity to meet anticipated demand growth from China has been challenged by the scale of China’s own capacity expansion. In its drive for self-sufficiency, China has significantly increased domestic production to the point of overcapacity and is now increasingly recognising the strategic and economic advantages of being a net exporter of these vital materials and is likely to continue leveraging this position.
Like other regions, such as Japan and South Korea, Europe has become caught in the crosshairs and is increasingly paying the price for operating ageing assets and lacking a natural feedstock advantage.
However, Europe’s position is arguably even more challenging, magnified by high energy costs, escalating CO₂ pricing and a regulatory framework that progressively reduces free carbon allowances.
What can the industry do collectively, in the short, medium, and long term, to respond?
First and foremost, immediate short-term actions must focus on Europe’s competitiveness, namely its energy prices and CO2 costs. Politically, Europe has spent the past six years advancing the view that sustainability drives innovation and investment, thereby strengthening competitiveness.
However, there is an argument that this approach may be putting the cart before the horse, when in fact, it's competitiveness that is the key, and is the engine that drives the innovation and the investment required to become sustainable.
In the medium term, the focus must be on Europe’s overregulation. Today’s policies are not material- or technology-neutral, limiting options. They do not incentivise reaching the goal; instead, they penalise for not making progress. By predetermining the only routes and steps to reach goals, options are limited, and flexibility is reduced. The reality is, if we want to reach our goals at scale and speed, we need as many options as possible and as much flexibility as we can get.
Some of the challenges faced are the result of choices made by Europe. Equally, that means some of the solutions are also choices Europe can make. However, solving the problem does not sit solely with politicians and regulators. Industry itself must take ownership and act.
It could be argued that today’s consolidation and rationalisation are needed to create a leaner, stronger, and more fit-for-purpose industry capable of competing in an increasingly global, highly competitive market.
The future for Europe may mean fewer assets and fewer producers, but those that remain are likely to be stronger, more efficient and more productive, helping to build a more resilient and sustainable industry over the long term.
What do we expect as immediate signals from our politicians and from our leaders?
Talk must now translate into action.
Antwerp has already hosted three summits attended by the European Commission and Heads of Government from Member States. Across all three meetings, the industry's messages have been clear and consistent. Yet despite broad recognition of the challenges facing European industry, there has been limited meaningful action in response.
As an immediate first step, Europe must intervene to address the EU ETS benchmark system and the continued reduction of free allowances. Under the current timetable, benchmark resets and declining free allocations are set to further increase pressure on European industry this year. Without intervention, a situation already widely acknowledged as a serious threat to Europe’s industrial competitiveness, economic stability and strategic sovereignty will only deteriorate further.
Clearly, addressing the structural flaws within the EU ETS and identifying the right long-term solution will take time. However, in the meantime, Europe cannot allow the system to continue intensifying the pressures already being faced. Industry needs some breathing space. Ideally, this would include a temporary suspension or easing of aspects of the EU ETS framework while longer-term reforms are developed and implemented. At a minimum, the system requires restructuring and an overhaul to ensure it is genuinely fit for purpose.
Would it be a solution that Europe significantly invests in energy, nuclear, wind and in feedstock?
We can clearly see the impact that achieving a structural cost advantage has had on the US petrochemicals industry. The boom in onshore oil and gas development and the resulting access to abundant, competitively priced ethane feedstock have fundamentally transformed the country’s position in global petrochemical production.
Europe, meanwhile, also possesses geological resources that could create opportunities for domestic onshore gas production. While there has been limited political willingness to pursue that option, it is important to recognise that this has ultimately been a strategic policy choice not to provide its chemical industry with the same level of feedstock advantage and competitiveness.
But there are other routes. The development and the drive to increase renewable power generation are both necessary and commendable, but it’s not enough. Europe needs a balanced energy strategy that combines renewables with other scalable and reliable energy sources, including nuclear power and natural gas, supported by carbon capture, recognising the importance of providing industry and society with reliable, affordable and scalable energy.
Furthermore, as power demand increases through greater electrification, Europe will also require a significant expansion of its power grid infrastructure and far greater interconnectivity between regions to ensure energy can be delivered efficiently, reliably and at scale.
With steel as inspiration, what are your opinions on the EU ETS, and how it relates to CBAM?
While the objective of reducing CO₂ emissions through the EU ETS is unquestionably the right one, the mechanism, as it stands today, raises legitimate questions about whether it is delivering genuine decarbonisation or simply reducing European emissions through deindustrialisation and the relocation of energy-intensive industries
The reality is that demand for materials such as steel and chemicals remains strong. Yet Europe is steadily losing industrial capacity while production increasingly shifts to regions with lower carbon costs and less stringent environmental standards. The resulting products are then imported back into Europe to meet domestic demand, creating an ultimate lose-lose scenario in which Europe loses economically, and the world loses environmentally.
Meanwhile, CBAM is often touted as a solution to the ETS’s shortcomings and is currently being implemented across several sectors, including the steel sector. In principle, it is a logical step towards creating a more level playing field between European producers and imports. However, CBAM, in its current form, is not fit for purpose for the chemicals industry, given its highly complex, integrated and interconnected value chains. Within chemicals, many downstream products are excluded. Foreign producers can easily circumvent CBAM by exporting processed goods such as ammonia and fertilzers instead of raw materials.
If Europe is to achieve both climate ambition and industrial resilience, policy must focus not only on reducing emissions within its borders, but on reducing global emissions while preserving a competitive and sustainable industrial base.
Where does China’s overcapacity leave Europe?
China’s significant capacity build-up, catalysed at least in part by policy incentives linked to emissions and industrial development targets ahead of 2030, will naturally decline as the deadline approaches. However, even if growth slows, Europe still needs to contend with the sheer eye-watering scale of the new capacity for years to come.
Many of these new assets are facing economic challenges, particularly where feedstock and input-cost advantages are lacking, and as such, market pressures may force rationalisation, to which the Chinese system will likely intervene decisively when required.
In the meantime, Europe must recognise and adapt to this new reality. Regardless of how the situation evolves in the long term, the scale of China's industrial capacity has fundamentally changed the competitive landscape. For the foreseeable future, Europe will need to learn to operate alongside the new gorilla in the room.
The US has become an important feedstock supplier – what does that mean for European capacities?
The US benefits from significant feedstock, energy and productivity advantages, while largely avoiding the carbon costs faced by European producers. As a result, it is likely to play an increasingly important role as an exporter into Europe, particularly in commodity-grade products. Consequently, imports will continue to play an increasingly important role in meeting European demand for commodity chemicals and polymers.
Europe’s competitive position, on the other hand, is likely to become increasingly focused on speciality and differentiated products, leveraging its ability to manage complex production processes.
However, Europe cannot thrive on specialities and differentiated products alone. Much like a tree, the chemical and polymer ecosystem cannot consist only of fruit and flowers. It also requires a strong trunk and healthy roots.
Finding that balance will be critical to ensuring both the competitiveness and long-term sustainability of Europe's chemical industry in an increasingly dynamic global landscape.
Turning to manufacturing in the US vs. Europe – how has that driven INEOS’ vision to invest in Europe and is there still a business case for ProjectONE?
There are broadly two schools of thought regarding Europe's future industrial position. The first view is that Europe is a market in which products should be manufactured locally to meet local demand. The second sees Europe primarily as a destination market for product exports. INEOS is firmly in the former camp that believes there is enduring value in producing in Europe to serve European demand, and Project ONE is a clear demonstration of that commitment.
That said, the world in 2026 looks very different from the world of 2019, when the final investment decision was taken. Many of the geopolitical, legal, regulatory and economic challenges facing European industry today were not anticipated at that time. The energy crisis, accelerating deindustrialisation pressures, shifting trade patterns, and heightened geopolitical tensions have fundamentally reshaped the industrial landscape.
Yet, somewhat ironically, these developments have reinforced rather than weakened the business case for Project ONE. The strategic value of embedding the economics of US ethane feedstock into European production has been demonstrated repeatedly at every stage of the economic cycle and across a wide range of market conditions, whether characterised by high gas and low oil prices or low gas and high oil prices.
In addition, the opportunity to produce lower-carbon ethylene in Europe has emerged as a significant advantage and an important source of future value.
Whilst we anticipated that some European cracker capacity would close over time, we had no anticipation that the closures would be as significant, dramatic, and as rapid as we've seen.
Despite the challenges, the complexity and the costs involved in bringing a project of this scale to completion, we remain incredibly excited about its future and cannot wait to get it online.
What encouraging message would you want to give to our European business leaders?
Petrochemicals are essential to modern life. They are also strategically important to Europe's economy and industrial value chains. Demand for petrochemical products will continue to grow globally and in Europe. The industry, therefore, has a future. However, it is increasingly clear that it will not survive in its current form. We need to acknowledge that reality and focus on defining Europe's place in the industry's next chapter.
European production will remain essential, particularly where it complements imports. European production must focus on where it adds value to the European value chains. Leadership in low-carbon and circular products has the potential to become an additional and important source of competitive advantage.
We must continue to make the case to the European Commission, the European Parliament and Member State governments that this industry remains vital to Europe's economic strength, strategic resilience and industrial sovereignty, but it needs help, and now.
If today's challenges are, in part, the consequence of policy choices, then the solutions are also within Europe's control!
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