Chemicals Industry Under Pressure in Europe
by Momina Hanan, Consultant
When I sat with key figures in the chemicals sector during our roundtable earlier this month, it was hard to ignore the hesitation in determining what kind of year this particular sector had faced. The EU27 chemicals industry reported a 10.6% decline in production and although not great, it seemed to be a salvageable figure.
It wasn’t long before China took centre stage in the discussion. China’s chemical sector is growing approximately 4x as fast as the EU and they are spending twice as much on research and innovation. The sentiment around the table was clear, these figures made Europe’s shortfall seem like a longfall.
The summer of 2024 saw the European elections take place which didn’t provide certainty to the world of chemicals; the drive for a green world, the stale nature of authorisation processes and a lack of co-ordination from the Commission is no foundation from which Europe can become “competitive” again. This term within itself is hard to quantify; put simply, how can the EU compete with such regulatory uncertainty and no direction? How does the chemicals industry in Europe define “being competitive”?
From our roundtable, the answer to the above was a unanimous “to have Europe leading the way again.” With high energy costs and lower demand and with the US and China being cheaper to buy from, I asked if EU27 was chasing a dream of being #1 for chemical production globally – perhaps too existential of a question. What’s clear is that the current system does not work. More dialogue, more transparency and more realistic sustainability goals are all needed, not to be at the top of the leaderboard again, but to at least close the gap.
Thank you to all who attended from BASF, LyondellBasell, Shell, ISOPA and DOW for such a stimulating conversation.
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