Insight into the EU Chemical Industry

Market Pulse Insight into the EU Chemical Industry

11.09.2020 From Ahlam Rais* |

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Under the European Green Deal, the EU chemical industry is looking to develop a more sustainable and green industry with the incorporation of clean technologies and solutions in the sector. PROCESS Worldwide shares the many dynamics of this significant market.

Chemical output in the EU27 dropped by 5.2 % from January – June 2020 compared to the previous year’s level, following the Covid-19 outbreak in Europe.
(Source: Deposit Photos)

Europe is the second largest chemicals producer in the world with China dominating the number one spot. The current Covid-19 scenario has dented the overall growth of the chemical sector in the EU and has made stakeholders nervous with market uncertainty across the globe. However, there still lies a silver lining, René van Sloten, Executive Director, Industrial Policy, Cefic says, “Some sectors of the chemical industry, like those providing essential supply chains during the Covid-19 outbreak, have remained stable or posted growth in the first half of 2020.” He goes on to state that companies producing essential supplies such as disinfectants, diagnostic tests, ventilators, protective masks, gloves and gowns, as well as Intensive Care Unit medicines have witnessed an increase in demand.

Chemical output in the EU27 dropped by 5.2 % from January – June 2020 compared to the previous year’s level (January-June 2019), following the Covid-19 outbreak in Europe, according to Cefic’s latest release. The spill-over effect of the crisis will continue for a while, but the weakest economic point of 2020 seems to have been reached in April. The chemical output data from June reported 2.9 % output growth compared to May of the same year, however, this is still about 9 % below the pre-crisis level (June compared to Feb of 2020). These are the first signs of some very modest signs of recovery in terms of chemical output in Europe, stated the release. Under these circumstances, the European chemical industry is also hopeful about positive market sentiments in the background of the European Green Deal.

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“We see immense market development opportunities presented by the Green Deal. Climate-neutral and circular economy solutions developed by the chemical industry will play a vital role in the post Covid-19 recovery.” – René van Sloten, Executive Director, Industrial Policy, Cefic

European Green Deal: The Next Business Strategy

Presented last year by the European Commission, the European Green Deal aims to reduce global warming emissions to net-zero by 2050 and ensure a toxic free-environment in the region. At the end of July, EU leaders also announced a historic funding package, including 857 billion dollars (750 billion Euros) of new investment to support initiatives that will deliver green and digital transitions. “We see immense market development opportunities presented by the Green Deal. Climate- economy neutral and circular solutions developed by the chemical industry will play a vital role in the post Covid-19 recovery,” shares Sloten.

He further elaborates that at the same time it is clear that an overall decline in cross-sectoral manufacturing activity, including automotive and refining, is likely to affect the pace of some investments. This makes the need for a coherent policy framework to support European investments into these technologies all the more critical and timely.

The EU chemical industry calls for investments into building renovation, clean mobility, development of all forms of clean hydrogen; chemical recycling, CCS and CCU. (Deposit Photos )

Hence, the EU chemical industry is calling for investments into innovative Green Deal solutions, such as e-crackers, chemical recycling, hydrogen, carbon capture and storage (CCS) and carbon capture and utilisation (CCU) infrastructure and other new technologies.

Chemicals Strategy for Sustainability

The ‘Chemicals Strategy for Sustainability’ is a vital part of the Green Deal and aims to strengthen the existing EU rules on chemicals, thus, making it easier to trade safe chemicals within the region. The strategy will also assist in better protecting people and the environment in the Eurozone against hazardous chemicals as well as encourage innovation for the development of safe and sustainable alternatives.

Increasing chemical production in the region especially essential chemicals with an aim to make the EU self-sufficient and at the same time boost the economic growth and create jobs is also another aspect of this Strategy. It also supports the view that substances should be reviewed by only one Union agency.

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According to the European Commission, the Strategy will build on an extensive evidence base gathered during recent policy evaluations and chemicals related initiatives, in particular the second ‘Reach’ Review (Reach Refit Evaluation), the findings of the fitness check of the most relevant chemicals legislation (excluding Reach) and identified challenges, gaps and weaknesses, the Communication on options to address the interface between chemical, product and waste legislation and the ongoing Fitness Check on endocrine disruptors.

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Europe is the sole region in the global chemical industry undertaking effective measures to upgrade its technologies and solutions as well as its policies with sustainability at its core. By getting a head-start in the development of green solutions, the EU chemical industry is bound to accelerate forward in the global chemical market.

* The author is an editor at PROCESS Worldwide. Contact: ahlam.rais@vogel.com

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