Sustainability. Innovation Human resources. Raw materials. Research. Energy Trade defence. Transport. Regulatory framework. International competition
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1 Enabler of a Sustainable Future: The European Chemical Industry A brief summary of the report from the High Level Group on the Competitiveness of the European Chemicals Industry Sustainability Raw materials Innovation Human resources Research Energy Trade defence Regulatory framework Transport International competition Intellectual property Trade liberalization
2 Capping 18 months of intense work and discussions by a broad range of stakeholders, the High Level Group on the Competitiveness of the European Chemicals Industry adopted its final report in February Drawn up by representatives from the European Commission, Member States, the chemical industry and its downstream users, trade unions, academia, environmental and consumer organisations, the report makes a broad and deep analysis of the factors that allow European chemical manufacturers to thrive and compete on the world market. It looks at how innovation in the chemical sector one of the largest industries in the EU will provide many of the new solutions and materials that are needed to address global challenges and societal needs such as climate change, sufficient food production, clean water and health. The High Level Group acknowledges that the chemical industry is a major enabler of sustainable development. Europe is, in many aspects, a global leader in chemical production and innovation. But European competitiveness is under pressure, and so is the ability of its chemical industry to provide the solutions the world needs. The High Level Group had made a total of 39 specific recommendations in 7 key policy areas. The aim is to develop and sustain the sector s global competitiveness and boost its unrivalled innovative potential. The European chemical industry is committed to take up its responsibilities in the development of a prosperous, sustainable society. This is a milestone in European industrial policy. Now the words must be translated into action. The final report is available on: To discuss this subject further, please contact René van Sloten at Cefic: rvs@cefic.be
3 7policy areas where Europe needs to take action: Innovation, Regulation, Human Resources, Energy & Feedstock, Climate Change, Logistics and Globalisation.
4 1. More INNOVATION is key for a sustainable and healthy European chemical industry Progress toward more sustainable use of natural resources will require bringing to market new chemical solutions. Europe excels in research, but has not met its potential bringing the research to market. Innovation requires a change in the mindset of industry and government. Europe must stimulate innovation in the chemical industry through the development of topical innovation networks focusing, for example, on energy and climate change abatement. It must support flagship projects to signal commitment to innovation. Public and private authorities must strengthen innovation clusters, facilitating cooperation across sectors, across borders and throughout the value chain. The European chemical industry must help develop a wider mandate for its SusChem technology platforms currently participating in the 7th Framework Research Programme to cover the full scope of chemical innovation across the EU. The European chemical industry s future depends on leadership in heavily knowledge-based activities. Companies must review and upgrade their R&D plans, promote open innovation and extend programmes to cover longer-term objectives. This requires closer cooperation with universities and research centres. The public sector must provide more effective support to the private sector in its R&D efforts, placing a greater focus on the quality of expenditure and avoiding the duplication of efforts. EU, national and regional R&D initiatives must be more closely coordinated with industry. And financial and fiscal support is vital for many innovative start-ups and SMEs. Innovation can only thrive with the confidence of investors and of the broader public, and industry must continue its efforts to build up a dialogue with society. 2. Protecting human health and the environment requires appropriate REGULATION to guarantee chemical safety The chemical industry and its products are subject to a comprehensive set of rules. A sound regulatory framework is built on proper consultation of stakeholders, good communication by authorities and harmonised and adequate compliance. The European Commission must ensure that all relevant considerations are addressed in impact assessments of new legislative proposals: sustainable development, health, international competitiveness, the effects on SMEs and innovation. The European Commission and Member State authorities must improve communications with industry and other stakeholders to facilitate the understanding of and compliance with regulatory requirement. Regulation should form a consistent, dependable framework. The European Commission and Member States should aim to avoid unnecessary divergence of rules. Knowledge is a key asset and intellectual property rights require effective protection. The EU must continue its efforts on reaching agreement on a Community patent; It must pursue international patentlaw harmonisation and facilitate international cooperation in the fight against counterfeiting. 3. Developing HUMAN RESOURCES requires more attention Innovation and competitiveness require outstanding education and the fostering and attracting of talent. The chemical industry thrives on knowledge, creativity and skills. Member States must boost the promotion of chemical and science education, starting with primary school. European universities and their chemistry and chemical engineering faculties must work with industry in defining new professional profiles. Industry, education and employment industry must work together to assess local human-resource requirements for the short and long term, and assess probable changes in soughtafter skill profiles. 4. ENERGY & FEEDSTOCK are decisive elements in competitiveness The base chemicals industry uses energy products oil, gas, coal and biomass both as a source of energy and as a raw material. Given the current pressures due to cost, availability and climate change policies, measures are needed to ensure a sufficient level of investment in base chemicals in Europe and to increase the contribution of renewable resources to support the competitiveness of the overall industry.
5 EU, national and regional authorities must seek to strengthen industry clusters and improve infrastructure to support the competitiveness of the petrochemical sector. Authorities must improve the performance and pursue the effective liberalisation of the natural gas market, and secure reliable imports at competitive prices. The private sector and public authorities must support the development of long-term contracts with electricity suppliers. Due to the significant potential for renewable feedstock to replace fossil fuels, R&D efforts in renewable feedstock are a priority. Policy makers should be aware of and seek to avoid the perverse effects of incentives that distort demand for bio-based raw materials and channel them into other uses. 5. CLIMATE CHANGE policy carries opportunities and threats for the chemical industry Action on climate change is a significant business opportunity for the European chemical industry, whose innovations make it possible to generate, store and save energy in a sustainable way. But climate change also requires a global approach by governments and further progress on energy efficiency and emissions. Chemical industry R&D must seek to fully exploit the business potential of the new paradigms created by climate change policies. Climate change must be addressed globally with the sufficient engagement of emerging economies. European industry needs a level playing field to compete. In view of the complexity of sectoral agreements in the chemical industry, climate change action requires support from public and private actors across the board. Europe s chemical Industry has made much progress in reducing its energy intensity and emissions, but further efforts are necessary. This will be helped by the provision of robust and verifiable information on the industry s emissions and emissionsreduction potential. European Member States and the Commission must make serious efforts for the full implementation of the revised Emissions Trading Scheme directive within the deadlines set. This must take into account all necessary measures to avoid carbon leakage. 6. LOGISTICS is an often neglected factor of competitiveness The ability to move chemicals safely and efficiently is a vital competitive factor. European logistics infrastructure is often neglected and offers considerable scope for improvement. Local logistics cluster platforms require more support and investment from public authorities and private sector stakeholders. The integration of chemical production sites into logistics clusters requires fewer transport bottlenecks. Progress is needed in intermodal platforms, efficient rail freight, road congestion and closing gaps in the olefin pipeline network. 7. GLOBALISATION, international competitiveness and trade: mounting pressure The European chemical industry is a strong player but faces increasing competition and lacklustre domestic demand. Promoting and safeguarding the competitiveness of the European chemicals industry must be a priority of EU trade policy. The multilateral approach to trade liberalisation must remain the preferred option, despite current difficulties in World Trade Organisation negotiations. In new accessions to the WTO, the EU must ensure that trade distorting practices are addressed. The EU should pursue Free Trade Agreements that go further than WTO agreements, while aiming for consistency between FTAs. In the absence of decisive progress in multilateral trade negotiations, there should be no weakening of the current arsenal of EU trade defence instruments and their use. The EU must aim for multilateral customs harmonisation. It must continue WTO and bilateral discussions to establish rules ensuring access to raw materials on a non-discriminatory basis, including renewable energy and feedstock.
6 Cefic - The European Chemical Industry Council Chemistry making a world of difference Cefic is the Brussels-based organisation representing national chemical federations and chemical companies in Europe. Cefic represents, directly or indirectly, around 27,000 large, medium and small companies in Europe, which employ about 1.2 million people and account for more than 29% of world chemicals production. Cefic - June 2009 Dépot Légal D/3158/2009/2 Cefic aisbl Avenue E. Van Nieuwenhuyse 4 B Brussels Belgium Tel: Fax: mail@cefic.be design:
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