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Europe is the second largest chemicals producer in the world

World chemical sales

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A look at global chemical sales over the past ten years (2010-2020) shows:

World chemicals sales was valued at €3,471 billion in 2020. Global sales decreased by 4.3% from €3,628 billion in 2019 to €3,471 billion in 2020.

With 14.4%, the EU27 chemical industry ranks second in total sales, with the United States coming in third with 12.3%. Worldwide the competitive landscape has changed significantly over the last ten years. Today, next to the EU27, US and Japan mostly emerging countries from Asia rank in the top 10 in sales.

The so-called BRICS countries (Brazil, Russia, India, China and South Africa) accounted for 50.2% of global chemical sales in 2020. Together with the EU27 and the USA the BRICS accounted for more than three quarters of global chemical sales, in 2020. The remaining quarter of global chemical sales were generated mainly by emerging countries in Asia, including the Middle East. With €1,547 billion in 2020, China is the largest chemicals producer in the world, contributing 44.6% of global chemical sales in 2020.

China dominates chemical sales world ranking

Chemical sales by country: top 10

Two of the top 10 country sales are American producers (the USA and Brazil), generating chemical sales of €479.7 billion (13.8%). Sales revenues in the US chemical industry decreased significantly by 6.4% in 2020 compared to 2019. Business development in Brazil showed a dramatic drop in 2020, with 19.1% decline in sales revenue.

Three of the top 10 country sales are European producers (EU27, Russia and UK), generating chemical sales of €574.5 billion (16.5%).

The global landscape of the chemical industry is changing rapidly. China is taking its chemical industry to the next stage of development and is moving from “following the lead” to “taking the lead” and from a “big country” to a “great power” of the petroleum and chemical industry, leading in technology innovation and trade, and prevailing in international markets.

EU27 market share dropped significantly

World chemical sales by country: top 10

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The European chemical industry is still a world leader and a highly innovative sector. With 90% of GDP growth taking place outside Europe in the coming decades, the challenge is to stay competitive. Taking advantage of emerging market opportunities will require EU27 leadership in creating attractive framework conditions that enhance the global position of European chemical industry.

The results also show a decreasing share of chemical sales for the EU27, USA, Japan, Taiwan and Brazil over the past ten years. The USA’s share of global sales went down from 16.5% in 2010 to 12.3% in 2020.  Japan‘s market share decreased from 6.8% to 4.1% in the same period.

China’s share of world chemicals market sales in 2020 grew to 44.6%, up from 25.8% reported in 2010. The EU27 contribution to world chemical sales dropped from 19.3% in 2010 to 14.4% in 2020. The EU27 gradually lost its top spot in world chemical sales to China.

World market share of EU27 chemical sales drops substantially

EU27 share of global chemicals market

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Global chemical sales are 2.4 times bigger in 2020 than twenty years ago (€1,460 billion vs €3,471 billion)

In 2000, the countries forming today the EU27 reported sales of €363 billion, making up 24.9% of world chemical sales in value terms. In 2020, sales values in the EU27 area increased by 38% compared to their original value of 2000. Because of steep growth in the global chemicals market, the relative share of the EU27 chemicals market drops substantially over the last 20 years, from 24.9% to 14.4%.

This trend is expected to continue in the future. Data analysis shows strong chemicals demand growth in China, and other emerging countries and low growth rates in Europe and North America, where Europe sells most of its chemicals.

Overall growth in demand and production of chemicals, as well as faster growth in emerging regions, will continue in the future. Growth in Europe remains low, mainly due to mature markets and an ageing population, while the EU27’s trade surplus remains high. Other structural factors will deeply affect the development of the chemicals business in the coming years such as immigration, digitalisation, populism, among others. Besides, there are other potential reasons for this relative decline, including increased competition from other regions, comparably high energy prices, lagging innovation, currency appreciation, high labour costs, and regulatory and tax burdens. Sector research and development (R&D) intensity, energy prices and the exchange rate have strong quantitative

Base chemicals account for about 58% of EU27 chemicals sales

EU27 chemical sales 2020 (€499 billion)

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Output from the EU chemical industry covers three main product areas: base chemicals, specialty chemicals and consumer chemicals. Base chemicals, also known as commodity chemicals, cover petrochemicals and their derivatives (polymers) along with basic inorganics. They are produced in large volumes and sold in the chemical industry itself or to other industries.

Base chemicals represented 58% of total EU27 chemical sales in 2020. The inorganic basic chemicals sub-sector includes production of chemical elements, inorganic acids such as sulphuric acid, bases such as caustic soda, alkalis and other inorganic compounds such as chlorine. The petrochemicals sub-sector covers manufacturing of chemicals using basic processes, such as thermal cracking and distillation. Polymers in primary forms are, in most cases, integrated into petrochemicals sites. Plastics in primary forms embrace the manufacture of resins, plastic materials and elastomers.

Specialty chemicals cover areas such as paints and inks, crop protection, dyes and pigments, and auxiliaries for industry (other chemicals such as glues, essential oils and gelatine). Specialty chemicals are produced in small volumes, but they nevertheless represented 28.3% of total EU27 chemical sales in 2020.

Consumer chemicals are sold to final consumers, such as soaps and detergents as well as perfumes and cosmetics. They represented 13.4% of total EU27 chemical sales in 2020. Petrochemicals and specialty chemicals accounted for the majority – 54.7% – of EU27 chemical sales that year.

about 2/3 of EU27 chemical sales generated in four EU27 Member States

EU27 chemical sales broken down by country (2020)

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Germany and France are the two largest chemicals producers in Europe valued at €227.4 billion, followed by Italy and the Netherlands. These four countries accounted for 65.2% of EU27 chemical sales in 2020, valued at €325.3 billion.  The share rises to 82.6%, or €412.3 billion, when including Spain, Belgium, and Austria. The remaining 20 Member States of the EU accounted for 17.7% of EU27 chemical sales in 2020, with Poland and Sweden being the biggest among them.

UK chemical sales reached €35.7 billion in 2020. EU27 chemicals exports to the UK reached €22.9 billion, while imports from the UK totalled €19.5 billion.

EU chemicals sales decreased for the second time in row since 2018

EU27 chemical sales structure (€ billion)

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Total sales after the peak of 2018, sales in 2020 decreased for the second time in row and reached the value of €499 billion; 8% below the peak level of 2018. Total sales of the EU27 chemical sector cover three categories: EU27, intra-EU27 sales, home sales and EU27 foreign sales (or extra-EU27 exports).

Intra-EU27 sales extended 31% of their value in ten years. Intra-EU sales cover revenue generated by EU27 chemicals companies from selling in the EU27 single market but not into their home country market, (e.g. French companies selling their chemicals products in Belgium or Germany). Removing both trade and non-trade barriers inside the European Union with the single market helped boost growth and competitiveness in the EU27 chemical industry, increasing the number of chemical transport operations across EU27 borders. Intra-EU27 sales climbed from €203 in 2010 to €266 in 2020.

EU27 Home sales continued to lose ground: over the last ten years they lost 47% of their original value. Home sales represent chemicals revenue generated by EU27 chemicals companies from selling into their home country market (e.g. French companies selling their chemical products in France). From 2010 to 2020, EU27 home sales decreased on average by 6.2% per annum; home sales went down from €121 billion in 2010 to €63 billion in 2020.

EU27 Foreign sales increased by 28% of their value during the ten-Year period. The European chemical industry is an export-oriented industry, with 34% of its production being sold outside the EU27. During the period 2010 to 2020, chemical exports outside the EU27 single market increased on average by 2.5% per annum. The chemical industry must continue to be globally competitive to sustain its existing capacity and grow in line with global demand.

About €170 billion is generated from selling chemicals outside the EU27 area

EU27 chemical sales structure (%)

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EU27 Home Sales: In 2020, 13% of chemical sales revenue was generated from selling in the EU27 country home market.

Intra-EU27 Sales: While “EU27 home sales” are declining, the importance of intra-EU27 sales is increasing. By 2020, intra-EU27 sales – excluding domestic receipts – accounted for 53% of total EU27 chemical sales, up from 45% in 2010. From 2010 to 2020, EU intra-EU27 sales increased on average by 2.8% per annum.

EU27 Foreign Sales: In 2020, 34% of chemical sales revenue was generated from selling in the non-EU27 chemical market (extra-EU27 exports), up from 29% in 2010. The three primary markets for EU27 chemical exports are the USA, UK and China.

More than half of (EU27+UK) chemicals are supplied to the industrial sector

Customer sectors of the EU27+UK chemical industry (2017)

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The European chemical industry is a key pillar for a sustainable society, providing not only employment to 1.2 million people in Europe but also acting as a solution provider to other sectors of the economy: especially, for the sustainable development challenges such as energy and climate, transport, health, food, hygiene, housing, among others.

The chemical industry supplies almost all sectors of the Economy. Chemical manufacturers not only transform raw materials into final products for everyday consumption but also provide inputs to a broad range of sectors, from agriculture to transportation.

More than half of the EU chemicals sold to downstream users go to other industrial sectors, according to the Oxford Economics study (March 2019). Beyond chemical manufacturers, the biggest industrial users of chemicals are the rubber & plastics, textiles, construction, computer production, and pulp & paper sectors. Overall, 56% of EU chemicals sold to downstream users go to other industrial sectors. The remainder goes to other branches of the global economy such as health and social work, agriculture, and services.

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