The Chemical Industries Association reports that the UK chemical industry faces severe 2026 challenges, including weak demand, falling employment, and likely site closures. Following years of declining production, these findings highlight intense pressures and a worsening outlook for the sector.

With 25 site closures over the past 5 years, Britain’s once dominant chemical industry is in the fight of its life, with many companies facing the existential threat of continued weak demand and hostile government policy.

That’s the view emerging yet again from the latest quarterly business survey conducted by the Chemical Industries Association (CIA), with 2026 showing little sign of pressure easing on UK chemical businesses.

The CIA’s survey showed that in the last 3 months of 2025, jobs have fallen as 38% of companies reported a decrease in employee numbers. Sales have fallen for 37% of companies. Overall 87% of companies expect at least a year of ‘weak business’.

Crippling energy costs—essential for both manufacturing and as a production feedstock—are putting massive pressure on the sector, with UK prices up to four times higher than key competitors due to government policy. Combined with an unsustainable decarbonization timeline and ongoing post-Brexit regulatory uncertainty, Britain is becoming an increasingly uncompetitive location for chemical manufacturing.

Reflecting on the latest survey outcomes, Steve Elliott, Chief Executive of the Association said: “It saddens me to say that these results are totally unsurprising, coming as they do on the back of a near 40% fall in UK chemical production between 2021 and 2024, alongside a similar percentage fall in the sector’s carbon emissions. That’s not coincidence; it’s the consequence of successive government failures to support UK manufacturing. From the undemocratic 2019 political decision to pursue net zero by 2050, regardless of the consequences, to the current drive to reduce carbon in a timeline increasingly out of step with the UK’s key competitors, we are witnessing decarbonisation through deindustrialisation. That’s not thoughtful policy, that’s economic vandalism.”

He continued, “The latest performance figures mean it will be very surprising if we do not see more businesses close their doors”. “The Government’s own Industrial Strategy recognises the chemical industry as a key foundational sector, delivering huge economic and social benefit across the country, underpinning our critical national infrastructure and supplying essential raw materials to growth sectors such as clean energy, defence, life sciences and wider advanced manufacturing. Fine words, but it’s action that is needed, and needed now if we want a successful Industrial Strategy, let alone a competitive UK chemical industry.”

Elliott concluded: “The huge irony here is that net zero can only be achieved through the products of the chemical industry and the skills of its people. All we are asking for is the ability to compete with at least one hand not tied behind our backs – and that’s not about handouts, it’s about business-supportive Government policy to enable a competitive transition to net zero. Give us the policy framework to compete around the globe and we’ll give the country the products and solutions of the future.”