Czech Republic

[Last updated July 2024]

Key facts

CHEMICAL INDUSTRY SNAPSHOT

The Republic’s second-largest manufacturing industry

The Czech chemical industry spans petroleum refining, chemicals, pharmaceuticals and rubber and plastics processing (NACE 19.2, 20, 21, 22). 

Chemicals play a key role in the Czech economy. This Integrated sector is the second largest manufacturing industry in the Czech Republic by sales, after automotive. The main chemical clusters are in North-West Bohemia, North Moravia and Central Bohemia, but plants can be found throughout the whole Republic. 

From motor fuels to tyres

Products include motor fuels, heating oils, lubricants, paraffin and asphalt, inorganic and organic bulk chemicals, fertilizers, basic petrochemicals, plastics, synthetic resins and rubbers, as well as paints, dyestuffs and pigments, agrochemicals, pharmaceuticals, tyres and other rubber products and plastics materials. 

Bio-fuels and bio-chemicals are starting to play bigger role in the economy. Hydrogen is already produced in annual quantity of more than 100 kt indicating further development esp. of “green hydrogen”. 

Energy Impact

The performance of the chemical industry, one of the most important industrial sectors in the Czech Republic in 2023 has seen a gradual stabilisation and recovery after the 1.5-year-long COVID-19 pandemic, which negatively affected the chemical (Nace 20) and plastics and rubber processing (Nace 22) sectors in particular due to a significant drop in demand from downstream industries and a significant drop in the prices of both raw materials and chemical derivatives.  The year since end of 2021 the industry was additionally  impacted by a significant increase in energy prices (natural gas and electricity) which caused a gradual increase in prices with a decrease in the profitability of the sector. 

The position of the chemical sector is still 2nd-3rd among the manufacturing industries in the country with a share of 13,5% in total production, 12,6%in profit generation and about 11% in number of employees, investments, wages and value added, see Figure above. 

Collaboration between industry and academia is working well. 

HOW ARE WE DOING?

Strengths

• Well-educated workforce 
• Strategic central European location 
• Unique national pipeline network crude oil, natural gas, motor fuels, ethylene, ethylbenzene, C4-fraction 
• Longstanding history and tradition of chemical production 
• Ongoing investment 
• A significant manufacturer of industrial and agricultural tires and plastic automotive parts 
• Excellent cooperation between companies and unions 

Challenges

• Relatively high energy and input costs natural gas, electricity and water 
• Dependence on imported raw materials, especially crude oil and natural gas
• Burdensome Czech and EU legislation 
• Insufficient scale economies 

OUR CONTRIBUTION TO A COMPETITIVE EUROPE

The Czech Republic favours a market-led economy, enabled by framework conditions in energy, research, education, infrastructure and other areas. These are backed by a national Smart Specialisation strategy and 14 regional Smart Specialisation strategies. Chemical recycling is becoming one of the key focus for development and implementation. 

Support of Education 

The Association of Chemical Industry of the Czech Republic supports education in chemistry, with the “Find the best young chemist of the Czech Republic” (more than 17000 children participated in the 10^th annual competition in 2022, more than 22 000 in 2023) and the “Teach chemistry attractively” with the presentation of 11 best projects at the national conference of teachers held in January 2023, 10 projects were granted for 2023 and presented on short video.

Industry leads

The Association of Chemical Industry of the Czech Republic promotes links with research and other industries via the Czech Technology Platform for SUSTAINABLE CHEMISTRY, the Czech Technology Platform PLASTICS, the Czech Bio Technology Platform and CO2 Czech Solution Group. These focus on new (nano) materials, effective and flexible processes, biotechnologies, renewable resources, bioplastics and recycling of plastics and other materials and CCU reflecting currect challenges brought by Green Deal.

Chasing added value and fosil sources replacement 

Opportunities for growth lie in the production of high value added products, notably nanomaterials, speciality chemicals, incl. explosives, polymers, and bio-chemicals.

Traditional commodities (monomers, polyolefins, fertilizers) remains key  basis for the sector with focus on energy optimisation and replacement of fossil energy sources. 

Source: Annual Review of Chemical Industry Development in the Czech Republic 2022

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