Europe’s chemical trade has reached a breaking level. The warning lights are not blinking — they’re blazing. Except Europe modifications course instantly, we danger watching a complete industrial spine, with the numerous jobs it helps, slowly hole out earlier than our eyes.
Take into account the power state of affairs: this 12 months European gasoline costs have stood at 2.9 instances greater than in america. What started as a short lived shock is now a structural drawback. Excessive power prices have gotten Europe’s new regular, with no signal of reduction. This isn’t sustainable for an energy-intensive sector that competes globally day by day. With out efficient infrastructure and focused energy-cost reduction — together with direct help, tax credit and compensation for oblique prices from the EU Emissions Buying and selling System (ETS) — we’re successfully asking European corporations and their employees to compete with their palms tied behind their backs.
Except Europe modifications course instantly, we danger watching a complete industrial spine, with the numerous jobs it helps, slowly hole out earlier than our eyes.
The influence is already seen. This 12 months, EU27 chemical manufacturing fell by an extra 2.5 %, and the sector is now working 9.5 % under pre-crisis capability. These will not be simply numbers, they’re factories cutting down, investments postponed and expert employees leaving websites. That is what industrial decline seems to be like in actual time. We’re shedding monitor of the variety of closures and job losses throughout Europe, and that is accelerating at an alarming tempo.
And the world is just not standing nonetheless. Within the first eight months of 2025, EU27 chemical compounds exports dropped by €3.5 billion, whereas imports rose by €3.2 billion. The quantity developments mirror this: exports are down, imports are up. Our commerce surplus shrank to €25 billion, shedding €6.6 billion in only one 12 months.
In the meantime, world distortions are intensifying. Imports, particularly from China, proceed to extend, and new tariff insurance policies from america are prone to divert much more merchandise towards Europe, whereas making EU exports much less aggressive. But once more, in 2025, most EU commerce protection instances concerned chemical merchandise. On this difficult atmosphere, EU commerce coverage must step up: we’d like quick, decisive motion in opposition to unfair practices to guard European manufacturing in opposition to worldwide commerce distortions. And we’d like extra free commerce agreements to entry development market and safe enter supplies. “Open however not naïve” should turn into greater than a slogan. It should form coverage.
Our producers adjust to the strictest security and environmental requirements on the earth. But resource-constrained authorities can’t make sure that imported merchandise meet those self same requirements.
Europe can be struggling to implement its personal guidelines on the borders and on-line. Our producers adjust to the strictest security and environmental requirements on the earth. But resource-constrained authorities can’t make sure that imported merchandise meet those self same requirements. This weak enforcement undermines competitiveness and security, whereas permitting merchandise that will fail EU scrutiny to enter the only market unchecked. If Europe needs world management on local weather, biodiversity and worldwide chemical compounds administration, credibility begins at house.
Regulatory uncertainty provides to the stress. The Chemical Trade Motion Plan acknowledges what trade has lengthy careworn: readability, coherence and predictability are important for funding. Clear, harmonized guidelines will not be a luxurious — they’re conditions for sustaining any industrial presence in Europe.
That is the place REACH have to be seen for what it’s: the world’s most complete piece of laws governing chemical compounds. But the true points lie in implementation. We subsequently name on policymakers to give attention to smarter, extra environment friendly implementation with out reopening the authorized textual content. Trade is dealing with too many headwinds already. Simplification will be achieved with out weakening requirements, however this requires a transparent political selection. We name on European policymakers to revive the funding and profitability of our trade for Europe. Solely then will the transition to local weather neutrality, circularity, and protected and sustainable chemical compounds be potential, whereas retaining our industrial base in Europe.
Our trade is an enabler of the transition to a climate-neutral and round future, however we’d like help for applied sciences that can outline that future.
On this context, the ETS should urgently evolve. With enabling situations nonetheless lacking, like a marketplace for low-carbon merchandise, power and carbon infrastructures, entry to cost-competitive low-carbon power sources, ETS prices danger incentivizing closures moderately than funding in decarbonization. This will likely cut back emissions contained in the EU, however it doesn’t decarbonize European consumption as a result of manufacturing shifts overseas. That is what is called carbon leakage, and this isn’t how EU local weather coverage intends to achieve local weather neutrality. The system wants pressing restore to keep away from critical penalties for Europe’s industrial material and strategic autonomy, with no local weather profit. These shortcomings have to be addressed effectively earlier than 2030, together with a strategy to neutralize ETS prices whereas trade works towards decarbonization.
Our trade is an enabler of the transition to a climate-neutral and round future, however we’d like help for applied sciences that can outline that future. Europe should make sure that chemical recycling, carbon seize and utilization, and bio-based feedstocks will not be solely invented right here, but additionally absolutely scaled right here. Complicated allowing, fragmented guidelines and inadequate funding are slowing us down whereas different areas race forward. Decarbonization can’t be constructed on imported know-how — it have to be constructed on a powerful EU industrial presence.
Critically, we should stimulate markets for sustainable merchandise that include an unavoidable ‘inexperienced premium’. If Europe needs low-carbon and round supplies, then fiscal, monetary and regulatory coverage recipes should help their uptake — with minimal recycled or bio-based content material, new worth chain mobilizing schemes and the best dose of ‘European desire’. If we create these markets however fail to make sure that European producers seize a fair proportion, we’ll merely create new alternatives for imports moderately than European jobs.
If Europe needs a powerful, revolutionary resilient chemical trade in 2030 and past, the choices have to be made right this moment. The window is closing quick.
The Vital Chemical compounds Alliance affords a path ahead. Its major aim shall be to sort out key points dealing with the chemical sector, resembling dangers of closures and commerce challenges, and to help modernization and investments in crucial productions. It is going to in the end allow the chemical trade to stay resilient within the face of geopolitical threats, reinforcing Europe’s strategic autonomy.
However allow us to be trustworthy: time is not on our aspect.
Europe’s chemical trade is the muse of numerous provide chains — from clear power to semiconductors, from well being to mobility. If we permit this basis to erode, each different strategic ambition turns into extra fragile.
In case you weren’t already alarmed — you ought to be.This can be a wake-up name.Not for tomorrow, for now.
Vitality help, enforceable guidelines, good regulation, strategic commerce insurance policies and demand-driven sustainability will not be elective. They’re the situations for survival. If Europe needs a powerful, revolutionary resilient chemical trade in 2030 and past, the choices have to be made right this moment. The window is closing quick.
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The sponsor is CEFIC- The European Chemical Trade Council
The last word controlling entity is CEFIC- The European Chemical Trade Council
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