How would you assess the performance of the Brazilian chemical industry over the past 12 months?

The Brazilian chemical industry, currently ranked fourth globally with a net revenue of US$158.6 billion in 2024, is a strategic sector and the most sustainable in the world, emitting 5% to 51% less CO₂ per ton produced compared to international competitors. It accounts for 11% of Brazil’s industrial GDP and is the third-largest segment within the national manufacturing industry, generating around two million direct and indirect jobs.

Despite its relevance, the sector as a whole has faced major challenges, such as the increase in imports. In 2024, imports accounted for 49% of domestic demand for chemical products in Brazil – a record high. Import volumes grew by 7.3%, driven by products from Asian countries benefiting from more competitive oil and gas prices, as well as an increase in imports from the US, especially in the petrochemical segment.

At the same time, Brazilian exports of chemical products dropped by 16.4% in volume in 2024. The domestic chemical industry’s idle installed capacity reached 36% in the same year. The industry is also affected by climate change, geopolitical uncertainty, and a surge in imports of low-taxed products. Moreover, the prices of naphtha and natural gas in the domestic market have not decreased at the same pace as in international markets.

The outlook for 2025 is similarly concerning. According to the Abiquim/Fipe Economic Monitoring Report (RAC), the first quarter of 2025 was also critical for Brazil’s chemical industry, with declines in all monitored indicators. Compared to the same period in 2024, production fell by 3.8%, domestic sales dropped by 2.6%, and the National Apparent Consumption (CAN) – which includes domestic production plus imports, minus exports – contracted by 5.3%.

These figures make clear the sector’s ongoing loss of global competitiveness, particularly in the face of unfair competition from imported inputs.

Installed capacity utilization averaged 62% in the first quarter of 2025, down three percentage points from the 65% recorded in the same period of 2024. This is the lowest average operating level in the industry’s historical series, which dates back to 1990.

A clear example of this loss of competitiveness is the shutdown of Brazil’s only Bisphenol plant, located in São Paulo, as well as the closure of the HPMC plant in Candeias, Bahia.

What initiatives has Abiquim undertaken to increase the global competitiveness of the Brazilian chemical industry?

Abiquim has been active on multiple fronts. I highlight four high-impact measures. The first is trade defense. In 2024, we secured the inclusion of 30 strategic products in the List of Temporary Trade Imbalances (DCC) through the Chamber of Foreign Trade (Camex). This measure raised import tariffs and has already shown concrete results.

The second, Abiquim worked for the reinstatement of Reiq and its expansion, with a focus on innovation and increasing production capacity. Since its regulation and reinstatement at the end of 2023, tax revenue has already shown a significant recovery – rising by nearly R$6 billion. This public policy has translated into real investments: R$1 billion has been injected into the chemical industry since the beginning of 2025.

The third front involves promoting structural public policies. We are actively supporting the approval of Bill 892/2025, which establishes the Special Program for the Sustainability of the Chemical Industry (Presiq). It combines tax incentives with the adoption of low-carbon processes, technological innovation, and expansion of installed capacity.

It is also important to highlight the creation of a modern and secure regulatory environment. In 2024, we celebrated the approval of the National Chemical Substances Inventory Bill, which positions Brazil as a hemispheric leader in chemical safety.

What are the implications of the National Circular Economy Strategy (ENEC) for Brazil’s chemical industry?

The consolidation of the National Circular Economy Strategy (ENEC) essential represents a strategic step for Brazil to shift from a linear model – based on extraction, production, and disposal – to a regenerative circular economy that is more resource-efficient and aligned with sustainability goals.

The chemical industry is a natural leader in this agenda. Being present in virtually all production chains, the sector is key to enabling technological and innovative solutions that promote circularity. This includes everything from redesigning products for greater recyclability to using renewable raw materials such as ethanol and biomass, and incorporating technologies aimed at the reuse and recycling of chemical waste.