European Chemical Companies Eye Modest 2025 Gains Amid Regulatory Headwinds
European chemical companies are forecasting modest profit gains for 2025, citing tariffs, employment challenges and regulatory burdens as key barriers, according to a study released June 2 by management consultancy firm Horváth.
The Chemicals Executives Flash Report included responses from board members and executives from 24 top European chemical companies.
Many companies are managing costs by relocating production sites or supply bases, the study noted.
Supply and production footprint optimization gained the most ground among management priorities, jumping six places in importance to fourth in the study ranking compared to last year.
“There are the major structural problems in Europe: the high energy and personnel costs, the ageing society — consumption is mainly driven by younger target groups — and the excesses of regulation, which, as of today, have still not been radically cut back,” said Peter Hartl, author of the study and partner at Horváth.
European chemical firms remain focused on sustainability targets with 75% of the survey participants saying it will strongly influence their business development decisions.
However, the importance of green transformation initiatives slipped one spot in the survey rankings to third, Hartl noted. Hartl noted that while future business models will focus on fossil-free or at least carbon-neutral strategies, the challenging regulatory and political climate is leading many companies to delay investments.
"Future business models will be fossil-free or at least carbon-neutral,” Hartl said. “The use of renewable energy will replace fossil fuels in the medium to long term. For the chemical industry, this is not an idealistic idea or a heartfelt wish but simple business math.”
Meanwhile, many European manufacturers indicated they plan to increase their digital investments, particularly in the area of artificial intelligence (AI).
“Technology is not only permeating internal processes but also core functions and areas, such as production planning and sales, particularly in pricing," Hartl said.
AI will play a greater role in maintenance optimization, with companies using it to improve forecasting and automated spare-parts ordering.
For 2026, most of the survey participants indicated increased profits of at least 5% as purchase prices normalize and energy costs stabilize.
