European energy policy has taken an unexpected twist, with talk of Russian gas potentially returning to the continent through a U.S. intermediary just as winter demand builds. Lower gas and power prices would reshuffle cost structures across the region, creating fresh winners and leaving some investors on the sidelines. This article walks through three European energy intensive industrial stocks tied to that story and why their exposure to this news matters for your portfolio.
The three stocks highlighted below are a useful entry point, but the full screen surfaced 18 more European energy intensive industrials with equally compelling narratives that are not covered here. To identify those extra candidates quickly, head straight into the European Energy-Intensive Industrials screener to analyze balance sheets, compare energy exposure, and focus on the highest conviction ideas.
Billerud (OM:BILL)
Billerud sits right in the crosshairs of this screener theme, with power hungry paper mills in Europe and a growing North American packaging footprint that together make energy costs and regional demand patterns central to how the story plays out from here.
Billerud is a global producer of paper and packaging materials, with around SEK24.2b of revenue from Region Europe and SEK11.8b from Region North America, plus SEK2.9b from Other activities, and a market value of roughly SEK21.6b.
"Although Billerud is pushing Project Evolution at Escanaba and has raised its North American packaging volume ambition to 300,000 tonnes by 2030, the company still carries significant exposure to European graphical and cartonboard grades where excess capacity and weak luxury demand are unresolved."
What happens if one persistent cost line moves in the right direction could make a marked difference to how investors see future margins.
That margin swing is only the start, and the full narrative for Billerud shows how energy, capacity shifts, and Escanaba could reshape where Billerud is headed next.
Arkema (ENXTPA:AKE)
Arkema fits this energy intensive chemicals screen neatly, since its adhesives, advanced polymers and coatings rely on gas and power heavy processes where cheaper European energy can directly shift cost competitiveness.
Arkema is a €4.2b market cap specialty materials producer that earns about €3.4b from Advanced Materials, €2.7b from Adhesive Solutions, €2.2b from Coating Solutions and a small corporate line and segment adjustment, with operations spread across Europe, the Americas and Asia.
"Significant investments in new production capacity, including the Singapore biobased polyamide plant, the U.S. PVDF expansion and additives facilities targeting refining and biofuel markets, remain in ramp up and are now contributing incremental EBITDA of around €60m in 2025 and a guided €50m in 2026. These investments can continue to support revenue and earnings as utilization improves."
What happens if one unresolved pressure on Arkema's energy heavy sites eases more quickly than expected could reshape how investors see future margins.
If that pressure valve really starts to open, the full narrative for Arkema steps through how Arkema's ramping projects, pricing power and risks could be getting mispriced right now.
Holmen (OM:HOLM B)
Holmen is another clear fit for the European Energy Intensive Industrials theme, with paperboard, paper and wood product mills that lean heavily on electricity while also owning renewable power assets that plug directly into the same pricing story.
Holmen runs a mix of forest, renewable power, wood products, and board and paper operations, generating about SEK13.7b from Board and Paper, SEK8.7b from Forest, SEK3.8b from Wood Products and SEK925m from Renewable Energy, and carries a market value near SEK45.0b.
"The ongoing global shift towards renewable materials and sustainable packaging is still expected to benefit Holmen's paperboard and forest businesses once demand improves, which could support revenue growth in higher value board grades over time."
What happens if one stubborn cost input moves in Holmen's favour could matter far more for future margins than recent earnings headlines suggest.
That cost shift is only part of the story, and the full narrative for Holmen explains in detail how Holmen's energy assets, packaging exposure and risks could be getting quietly mispriced.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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