1、Navigating European chemicalsREPORTCapturing opportunities in transforming value chainsCover:183363671/iStock 2 Roland Berger|Winning in European chemicalsEuropes chemicals industry is on the brink of a major transition.It must decarbonize its energy system and improve circularity while developing a

2、nd reinforcing strategic value chains to increase its autonomy in the face of intensifying geopolitical uncertainty.As Europe is the second-largest chemicals producer worldwide,achieving such a shift requires large capital investments.Looking at Europes Green Deal ambition to become a global frontru

3、nner in sustainability,additional investments of over EUR 2 trillion are estimated to be required in the chemicals industry to reach the climate and circularity targets by 2050.But Europe is not attracting these kinds of investments.In fact,Europes share of global investments in the chemicals indust

4、ry has halved in the last 20 years.The situation is becoming even more challenging when considering some other factors at play.First,high raw material prices and energy costs are pushing Europe towards the end of the global cost curve in many value chains.Second,competition from the US,China and the

5、 Middle East is increasing,thereby challenging Europes footprint.Third,Europe sets strict regulatory frameworks for the transition,but lacks strong and transparent incentive programs.Fourth,Europe has a challenging public and regulatory environment for industrial investment and activities.As a resul

6、t,many projects in Europe have been canceled or postponed.There are too many risks in the system,pushing chemicals players to prioritize investments elsewhere.But this does not mean that there are no opportunities in Europe.When look-ing from a value chain perspective,we see risks,but also opportuni