Navigating Turbulence: Challenges and Prospects for the German Plastics Industry

The German plastics manufacturing sector faced significant hurdles in 2023, grappling with soaring energy prices, escalating labour costs, and subsequent production expenses. Sales plummeted by 21.9%, accompanied by a 16% decline in domestic plastics demand, marking the second consecutive year of decline as reported by Plastics Europe.

Dr. Ralf Düssel, CEO of Plastics Europe Deutschland eV, lamented the severity of the economic downturn, highlighting it as the most dire crisis the industry has faced. Prospects for recovery in 2024 appear bleak, with production anticipated to stagnate at approximately 25% below 2022 levels.

However, amidst the gloom, there remains a glimmer of hope. Plastics Europe cautiously anticipates that climate progression agreements and regulatory developments, including the Growth Opportunities Act, may serve as catalysts for revitalising plastics production in Germany and across Europe.

Ingemar Bühler, managing director, echoed this sentiment, expressing determination to pursue a circular economy despite the challenging market landscape. He stressed the importance of strategic investments in innovative technologies, particularly in areas such as mechanical and chemical recycling processes and the production of plastics from non-fossil raw materials.

The association emphasised the technological advantage held by the German and European plastics industry compared to global counterparts, underscoring the need to preserve and expand this edge through targeted investments.

Amidst similar struggles, Aluminium Deutschland reported a sharp decline in aluminium production in Germany in the third quarter of 2023, citing over-regulation, high energy costs, and economic recession as ongoing challenges likely to persist into 2024.

Furthermore, Cepi’s findings revealed a downturn in European paper and board production in 2023, attributed to energy costs, economic pressures, and destocking.

Despite these challenges, the German plastics industry remains resilient, with a steadfast commitment to innovation and sustainability paving the way forward amidst turbulent times.