Aerial view of Ineos Phenol facility in Gladbeck, Germany
On June 17, 2025, INEOS has announced the permanent closure of its Gladbeck phenol and acetone facility in Germany, citing uncompetitive European energy costs, punitive CO₂ tax policies, and a collapse in local demand as key drivers behind the decision. The Gladbeck plant, operational since 1954 and once the world’s second-largest phenol production site and the largest single-train phenol plant globally, with a capacity of over 650,000 tonnes per year, will cease operations after a strategic review determined the site could no longer compete with cheaper imports and amid global oversupply. The closure will directly impact 279 jobs and affect over 1,500 indirect positions.
Structural Pressures and Market Context
Europe’s chemical industry is facing a severe structural crisis. Surging energy and carbon costs have eroded competitiveness, while sluggish industrial activity and persistent overcapacity have led to weak demand for aromatics and their derivatives. Aromatics have been particularly hard hit: in 2023 and 2024, they accounted for 41% of total chemical plant closures in Europe, the European Chemical Industry Council (Cefic) reports. Margins for key products such as styrene and benzene (a phenol precursor) have been negative since mid-2022, and the European polyester (PET) industry is also under existential threat from high costs and cheaper imports, despite EU anti-dumping measures.
INEOS specifically cited the exit of several downstream consumers of phenol and acetone in Europe, making local demand insufficient to justify continued operation or investment at Gladbeck. The company’s chairman, Jim Ratcliffe, warned that unless European regulators address the cost and policy environment, further deindustrialization is inevitable.
Strategic Shifts: From Closures to Bold Investment Decisions
The Gladbeck shutdown follows other high-profile INEOS moves in Europe. In April 2025, Petroineos—a joint venture between INEOS and PetroChina—halted crude processing at Scotland’s Grangemouth refinery, ending a century of refining at the site. The facility is being converted into an import terminal for finished fuels, a move driven by sustained financial losses and inability to compete with larger, more modern refineries in Asia and the Middle East.
Despite these closures, INEOS is not retreating entirely from the European chemicals sector. The company is pressing ahead with Project ONE, a €4 billion investment in a state-of-the-art ethane cracker in Antwerp, Belgium. Project ONE is billed as the most energy-efficient facility of its kind in Europe and is expected to be operational by 2026. This investment is seen as a bet on the future of high-value, lower-emission petrochemical production in Europe, even as legacy assets are shuttered.
Risk and Renewal in European Chemicals
INEOS’s strategy is increasingly bifurcated: the company is closing older, energy-intensive, and less competitive assets in Western Europe, particularly those exposed to high energy and carbon compliance costs, while simultaneously investing in new, world-scale, energy-efficient plants that can compete globally on cost and sustainability grounds. The closure of Gladbeck reflects broader structural shifts in the European chemicals market, where high costs, regulatory pressures, and weak demand are forcing rationalization and consolidation. INEOS’s willingness to invest in new capacity (Project ONE) while exiting legacy operations signals a long-term commitment to Europe—but only on terms that ensure global competitiveness and regulatory alignment.
The net effect is a European chemical industry in transition: legacy capacity is being eliminated, supply chains are shifting toward Asia, and only the most efficient, modern, and strategically located assets are likely to survive. For INEOS, the path forward is clear—exit where Europe is uncompetitive, invest where innovation and efficiency can deliver a sustainable edge.
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