Chemicals are the start of all strategic value chains and are key for many EU Green Deal solutions. From solar panels to wind turbine, and passing by grid technologies, all of them require different chemical materials and substances to be manufactured.
And as Europe with the Net-Zero Industry Act has the ambition to scale up the manufacturing in Europe of net-zero technologies the fundamental role played by chemicals in these value chains cannot be forgotten.
The pivotal role played by chemicals in several strategic value chains needs to be reflected in the Net-Zero Industry Act and the Critical Raw Material Act and supported. This was the key message that Cefic Director General Marco Mensink sent to the Committee on Industry, Research and Energy of the European Parliament during the recent public hearing on the Net Zero Industry Act (watch the full hearing here).
Increasing international competition, lack of raw materials, skyrocketing energy and feedstock prices, loss of strategic autonomy, risks of externalising key value chains and industrial processes: the European chemical sector faces enormous structural challenges that are undermining its competitiveness. And as the competitiveness of our sector diminishes, the future of many solutions and technologies needed to achieve the 2050 goals that rely on chemistry are at stake.
If we take a magnifying glass and look inside a wind turbine, you will see carbon fiber in the blades, silicones in lubricants and sealants, and resins that keep materials together. All these materials are developed by the chemical industry.
Marco Mensink
However, the way the policy frameworks are currently set does not support the key sectors, like chemicals, that contribute to the NZIA technologies.
To change this equation, Europe needs to look critically at its dependencies, understand how deep the roots of dependencies go, and how deeply they impact Europe’s ability to be resilient in times of crisis. The scope of the critical raw material act needs to be extended beyond metals and also consider all the other materials Europe is importing today.
Focusing only on one specific subset of raw materials while neglecting how complex and multifaceted value chains are, will not support Europe’s strategic autonomy. This approach will rather just shift dependencies downwards to a different segment of the production process.
Where the USA makes a business case, Europe makes a law. Today, the NZIA focuses only on technologies, but forgets the industries behind these technologies; what we are going to see in the future is net-zero technologies made with Chinese steel and American chemicals.
Marco Mensink
A strong Europe relies on a strong industrial basis that can support its transition, and the European chemical sector is set to play a pivotal role. To untap its potential today and in the decades to come, it is fundamental to have a policy framework that makes it competitive on a global stage and capable to attract the right investments. As chemicals are behind most of the technologies listed in the Net-Zero Industry Act, therefore chemicals need to be included in the Net-Zero Industry Act and in the Critical Raw Material Act.
More specifically, Europe needs a policy framework that creates the right incentives for business through easy procedure, simplified processes and support for operations via tax breaks. This would also help cope with the high energy prices paid in Europe. What Europe needs is a holistic vision that does not cherry pick winners in advance: such an approach could preclude the deployment of technologies that can help us achieve the climate neutrality target such as Carbon Capture and Utilisation (CCU).
Lastly, Europe needs to bring circularity back into the picture. On the path to 2050, it will be important to transition from a linear economy to a circular economy, and solutions like chemical recycling and CCU are essential for this circular transformation,. They make available to the chemical sector recycled molecules that can be used to produce the chemicals materials needed in our society, so they should be included in the scope of the Net-Zero Industry Act.