Petrochemical industry struggles with overcapacity, rising costs, and shaky green investments

Executives at a Houston conference warned that global overbuilding, slow economic growth, and policy uncertainty are shaking the foundation of the petrochemical industry as it faces pressure to go greener.

Alexander Tullo reports for Chemical & Engineering News.


In short:

  • Petrochemical makers are reeling from a supply glut triggered by over-investment and weak post-COVID demand, especially in Europe, where plant closures loom.
  • Wall Street has pulled back from green plastic startups after early enthusiasm faded, leaving companies scrambling to prove profitability without subsidies.
  • U.S. producers fear a future of tighter ethane supplies and mounting trade tensions under the Trump administration, which could raise raw material and export costs.

Key quote:

“If you can’t see a path to a clear, self-sustaining economic model over — let’s say over 5–10 years, maybe not 0–5 — then likely it is not something you should be doing.”

— Bob Patel, director of Air Products & Chemicals

Why this matters:

For years, cheap U.S. shale gas fed a rapid buildout of facilities producing plastics, fertilizers, and synthetic materials. But that growth strategy is now under strain. Demand is wobbling under pressure from global economic uncertainty, while production costs are climbing. At the same time, ambitious climate targets are forcing policymakers and corporations to take a harder look at the emissions-intensive nature of petrochemical production. As political rhetoric around sustainability heats up, the industry's ability to evolve without sacrificing profitability is becoming a test case for how legacy sectors adapt — or fail to adapt — to a decarbonizing world.

Related EHN coverage:

Resilient daisy plant flowering on a sandy desert with no water.
Credit: AlessandroZ/BigStock Photo ID: 305500738

Spotlight on UN desertification summit as it mulls how to spend $12bn war chest

Extreme weather has raised the significance of Cop17 talks starting this week on tackling drought and land degradation.

Electric semi-truck filling up at a charging station

Australia is spending billions on fuel security. What if some of that went to electric trucks?

The war in Iran has drawn attention to something invisible to most Australians — we use a lot of diesel to keep this country running. 
Aerial view of Glen Canyon Dam, Lake Powell, and desert landscape

Record low levels at Lake Powell threatens water and electricity supply

The water level at Lake Powell has fallen to a record low in another sign of crisis along the Colorado River.
Seasonal farm workers work a field and pick and package strawberries in Lake Forest, California.
Credit: mikeledray/BigStock Photo ID: 243875698

As temperatures get hotter, pesticides are more dangerous to farmworkers

Research shows heat amplifies the dangers of pesticides for farmworkers, and that the problem is poised to grow as the global climate warms.
Illegal gold mining operation on the Madre de Dios river in Peru
Credit: meunierd/BigStock Photo ID: 31030607

Peru steps up fight against illegal gold mining as it spreads into protected Amazon reserve

Peruvian authorities have intensified efforts against illegal gold mining in the Amazon's Madre de Dios region.
A group of three cyclists bicycling alongside a river

Destroyed crops, riverbed cyclists and a ‘Rock of Starvation’: how drought has devastated the Danube

The Guardian travelled 100 miles along the EU’s longest river, where some residents are struggling to secure drinking water.

From our Newsroom
Multiple Houston-area oil and gas facilities that have violated pollution laws are seeking permit renewals

Multiple Houston-area oil and gas facilities that have violated pollution laws are seeking permit renewals

One facility has emitted cancer-causing chemicals into waterways at levels up to 520% higher than legal limits.

Regulators are underestimating health impacts from air pollution: Study

Regulators are underestimating health impacts from air pollution: Study

"The reality is, we are not exposed to one chemical at a time.”

Pennsylvania governor Josh Shapiro speaks with the state flag and American flag behind him.

Two years into his term, has Gov. Shapiro kept his promises to regulate Pennsylvania’s fracking industry?

A new report assesses the administration’s progress and makes new recommendations

silhouette of people holding hands by a lake at sunset

An open letter from EPA staff to the American public

“We cannot stand by and allow this to happen. We need to hold this administration accountable.”

wildfire retardants being sprayed by plane

New evidence links heavy metal pollution with wildfire retardants

“The chemical black box” that blankets wildfire-impacted areas is increasingly under scrutiny.

Stay informed: sign up for The Daily Climate newsletter
Top news on climate impacts, solutions, politics, drivers. Delivered to your inbox week days.