Market evolution: Aliphatic hydrocarbons (CN 2901) — 2015–2025

Introduction

This report examines the evolution of the European Union's external trade in acyclic hydrocarbons (Customs code 2901) over the period 2015–2025. CN 2901 is a bundling heading that covers saturated acyclic hydrocarbons, ethylene, propene (propylene), butene, buta-1,3-diene/isoprene, and other unsaturated acyclic hydrocarbons. These products are fundamental building blocks of the petrochemical industry, serving as feedstocks for polymers, solvents, and a wide range of chemical intermediates.

Over the 11-year window, the EU has remained a consistent net importer of this product group. Total imports grew from €2.61 billion in 2015 to €3.15 billion in 2025 (+20.4%), while export values contracted from €576 million to €538 million (−6.6%). The resulting trade deficit widened from €2.04 billion to €2.61 billion (−28.0%). The analysis below identifies three main dynamics that shaped this trajectory.

1. A Tectonic Shift in Supply Origins: The Rise of the United States at the Expense of Russia and the United Kingdom

The most striking structural change over the period is the radical reorientation of the EU's import sourcing for acyclic hydrocarbons. The partner breakdown reveals a dramatic shift in the relative weight of the EU's three largest external suppliers.

1.1 The United States became the dominant supplier by a wide margin

US exports of acyclic hydrocarbons to the EU surged from €253 million in 2015 to €1.53 billion in 2025, representing a 504.5% increase. This growth reflects the structural cost advantage that US petrochemical producers have enjoyed since the shale gas revolution: abundant and cheap ethane and natural gas liquids (NGLs) from the Permian Basin and other shale plays translate into some of the lowest production costs globally for ethylene and its derivatives. By 2025, the United States alone accounted for nearly half of all EU imports of this product group by value.

1.2 Russia and the United Kingdom saw steep declines

Conversely, imports from the Russian Federation fell from €491 million to €192 million (−60.9%). While the decline began modestly, it accelerated sharply from 2022 onward, consistent with the sanctions regime imposed following Russia's invasion of Ukraine and the broader geopolitical decoupling. Russia's share of EU imports thus shrank considerably, though it remained a non-negligible supplier.

The United Kingdom, which was actually the EU's single largest import partner in 2015 at €880 million, saw its exports to the EU fall to €424 million (−51.8%). This decline likely reflects a combination of post-Brexit trade friction (customs procedures, rules of origin, regulatory divergence) and the structural decline of the UK's own North Sea-linked petrochemical capacity.

1.3 Concentration of imports intensified markedly

These shifts had a direct effect on import concentration. The Herfindahl-Hirschman Index (HHI) for imports by value rose from 2,108 to 3,115 (+47.8%), moving the market from moderate to high concentration. By 2025, the top three import partners (US, Norway, UK) collectively dominated the supply base far more than was the case a decade earlier, with the US alone representing a very large single-country share. This increased concentration raises supply-sensitivity concerns, even though the United States is a politically allied nation.

2. Domestic Production Stagnated While the EU's Export Capacity Eroded

While import dynamics were being reshaped by geopolitics and comparative advantage, the EU's own production capacity and export competitiveness showed signs of structural decline.

2.1 Production volumes fell while values held roughly steady

EU production of acyclic hydrocarbons (measured in kilograms via Prodcom data) declined from 26.6 billion kg in 2015 to 22.6 billion kg in 2025, a drop of 15.2%. Meanwhile, the production value remained essentially flat (−0.6%, from €17.0 billion to €16.9 billion). This combination — falling volume, stable value — indicates that unit prices of domestically produced material rose, consistent with the broader energy-price inflation that affected European petrochemical producers, especially after 2021. European crackers, largely naphtha-based, faced a widening cost disadvantage relative to gas-based US and Middle Eastern competitors.

2.2 Export volumes contracted sharply

EU exports of acyclic hydrocarbons to non-EU countries fell from 711,000 tonnes in 2015 to just 483,000 tonnes in 2025 (−32.0%). This contraction was not uniform across sub-products:

Ethylene exports were the most severely affected, falling by over 83%, reflecting the fact that the EU has progressively lost its competitiveness in basic olefins. The sole exception was butene, where export volumes actually grew by 20%.

2.3 Export markets reoriented toward Asia and the Middle East

The destination profile of EU exports also shifted. Exports to China grew from €26 million to €138 million (+431.6%), and those to Saudi Arabia from €23 million to €59 million (+162.2%) and to Korea from €13 million to €42 million (+227.0%). Meanwhile, exports to traditional Western markets declined: the US fell from €95 million to €21 million (−77.8%), and Indonesia collapsed from €63 million to €1.2 million (−98.0%). This suggests the EU's remaining export competitiveness lies in niche, higher-value sub-products destined for Asian markets, rather than bulk commodity flows.

3. Price Volatility, Energy Shocks, and Supply-Side Disruptions

The 2015–2025 period was marked by significant price turbulence, which shaped both the value and the composition of trade flows.

3.1 Prices exhibited two distinct regimes

EU import prices for acyclic hydrocarbons moved within a wide band: from a low of €568/t (around 2020) to a high of €1,072/t (around 2022). The first half of the period (2015–2020) was characterized by relatively subdued prices, depressed by the 2015–2016 oil-price downturn and the 2020 COVID-19 demand shock. From 2021 onward, prices spiked dramatically, driven by the post-pandemic demand recovery, the 2021–2022 European energy crisis (TTF gas prices reached historic highs), and the disruption of Russian supply chains. By 2025, import prices had moderated to €760/t, but remained well above pre-2020 levels.

Export prices followed a similar trajectory but with a higher baseline (€810/t in 2015 to €1,113/t in 2025, +37.4%), consistent with the EU exporting higher-value, more processed hydrocarbons.

3.2 Supply shocks were detected in several partner relationships

The volatility analysis identified notable supply-side shocks in EU export flows:

The Taiwan and Indonesia price shocks stand out as extreme outliers, likely reflecting isolated or spot-market transactions rather than sustained trade relationships. This is corroborated by the very high coefficients of variation (CV) observed for these partners (0.997 for Taiwan, 0.736 for Indonesia), indicating highly irregular trade patterns. By contrast, stable partners like Switzerland (CV = 0.114) and Morocco (CV = 0.249) showed far more predictable flows.

3.3 The EU's import reliance grew modestly despite structural shifts

The net import reliance ratio edged up from 11.7% to 12.5% over the period (+6.6%). While this change appears modest in headline terms, it masks the structural shift: the EU now depends more heavily on a smaller number of suppliers (as evidenced by the rising HHI), and the cost of those imports has increased. The trade intensity ratio also grew from 15.5% to 17.5%, indicating that trade has become a slightly more important component of the market. The export propensity ratio rose from 2.3% to 3.2% (+35.2%), suggesting that the EU's remaining production is slightly more export-oriented, even as its overall competitiveness in bulk products has declined.

Conclusion

The EU's trade in acyclic hydrocarbons over 2015–2025 tells a story of structural realignment. The shale gas revolution transformed the United States into the EU's dominant supplier, displacing Russia (accelerated by sanctions) and the United Kingdom (affected by Brexit and industrial decline). This shift concentrated import supply, pushing the HHI from 2,108 to 3,115 and raising strategic dependency on a single partner. At the same time, Europe's own naphtha-based petrochemical sector saw production fall by 15% in volume and its export footprint shrink dramatically, particularly in bulk olefins like ethylene. The remaining EU exports reoriented toward Asian and Middle Eastern niche markets. Price volatility — driven by oil-price cycles, the pandemic, and the 2022 energy crisis — added further turbulence, with import prices swinging from €568/t to over €1,072/t before moderating. Going forward, the EU's competitiveness in this sector will depend heavily on its ability to manage energy costs, invest in alternative feedstocks, and navigate the geopolitical landscape that has fundamentally reshaped its supply chain.