LyondellBasell details plan to review European assets: More plant closures ahead in Europe

Facing market challenges, cost pressures, and evolving regulations, European petrochemical producers are undertaking strategic reviews to protect margins and ensure profitability. LyondellBasell, who announced a strategic review of the European assets in early May, has detailed the near- term targets recently. Now that the petchem industry rationalization has evidently kicked off, the question is: how many more plants will face closures across Europe?

Challenging landscape in Europe compel producers to act

The European petrochemical industry is navigating a complex landscape characterized by high operational costs, strict regulatory environments, and shifting market dynamics. In an effort to adapt to these challenges, companies like ExxonMobil and Sabic have announced closures of their assets. Moreover, ExxonMobil is reportedly considering downsizing its LDPE plant in Belgium as part of a broader restructuring plan to maintain competitiveness in Europe.

In July, Indorama Ventures has closed its PET/PTA site permanently in Rotterdam, the Netherlands, as part of the asset optimization plan under IVL 2.0. The decision came after the company announced its intention to shut some plants permanently back in April this year.

These reviews aim to align the companies’ operations with broader strategic goals, including enhancing core businesses, developing sustainable and low-carbon solutions, and improving overall performance and culture.

LyondellBasell lists six European assets for review: What do these assets encompass?

LyondellBasell first announced launching a comprehensive strategic review of its European assets within its Olefins & Polyolefins (O&P) and Intermediates & Derivatives (I&D) business units on May 9, this year.

On August 2, the company revealed its second quarter earnings, where a list was shared for European assets within strategic review during the conference call. According to ChemOrbis Production News Pro, these assets mainly include the plants below:

• Berre (France), which houses ethylene (465,000 t/y), LDPE, (320,000 t/y), PP (350,000 t/y) and propylene (255,000 t/y) facilities.


• Muenchmuenster (Germany) plant, which includes a cracker with ethylene (400,000 t/y) and propylene (227,000 t/y) and an HDPE (250,000 t/y) plant.


• Brindisi (Italy), where a PP plant was already phased out permanently in early 2024 even before the strategic review kicked off. The complex houses a second PP plant with 260ktpa capacity, which is also under focus again.


• Tarragona (Spain), where two PP plants with 390 ktpa capacity are located.


• Carrington (United Kingdom), which houses a single PP plant with 210 ktpa capacity.


• Maasvlakte (Netherlands), which is a joint venture with Covestro with 680,000 t/y PO/SM capacity.

The company said that assets within the Advanced Polymer Solutions (APS) and all joint ventures within O&P EAI segment were excluded from the review.
What awaits these assets under strategic review?

The company listed three options: 1) Profitability improvement, 2) alternative owners and 3) rationalization.

That is to say, these plants will either be scaled down or sold if not closed permanently.

Is LyondellBasell exiting Europe?

The company seems to assure no, in a bid to deny market speculations in this respect. Europe remains core for LYB, according to the presentation, listing the core assets in order like the following: Wesseling and Knapsack (Cologne, Germany), Frankfurt (Germany), Ferrara (Italy), Moerdijk (Netherlands), QCP (Belgium/Netherlands), Botlek (Netherlands) and Fos-sur-Mer (France).

These assets are integral to LyondellBasell’s operations in Europe, given their access to advantaged circular and renewable feedstocks, proprietary low-cost and low emission technologies, synergies with Technology segment, while the investment in Cologne recycling hub persists without any change in plans.

Is rationalization the new normal?

European producers have been experiencing significant margin losses since the post-pandemic era due to rising production costs and a decline in consumption. Meanwhile, a return to pre-pandemic levels seems unrealistic. As a result, facilities with low profitability need to undergo consolidation and rationalization to adapt to the “new normal.” Further closures are around the corner, as adjusting run rates alone has not been effective.

The small size and advanced age of the region’s ethylene cracker fleet make closures inevitable, with half of around European crackers being anticipated to undergo some rationalization, according to some industry sources, while others argue that it is 25% under risk.

The freight crisis that has been underway since late last year has only been delaying and/or slowing the momentum of this big, phenomenal revolution.