SEXB: New EU chemicals put at a critical crossroads – Net market loss of 12% by 2040

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Leading companies in the industry have called on the European Commission to work together to define the transition pillars of the EU chemical industry so that the huge investments needed to achieve the Green Agreement’s goals are sustainable.

In this context, the Pan-European Chemical Industry Council (Cefic) published the first of a series of studies, conducted by the independent economic research consultancy (Ricardo Energy & Environment), on the economic and business implications of the European Strategy for the Sustainability of Chemicals (CSS). Data from more than 100 European chemical companies will be used as data to contribute to the impact assessments of the European Commission proposal for classification, labeling and packaging (CLP) and REACH, which are the pillars of EU chemicals legislation. .

According to the study, up to 12,000 substances could potentially fall within the scope of the two forthcoming legislative proposals – changes to the Classification, Packaging and Labeling Regulation (CLP) and the implementation of a General Risk Approach (GRA). The study found that these substances could cover up to 43% of the total turnover of the European chemical industry.

After applying different weights in order to calculate the uncertainty about the definitions and criteria in CSS, the report concludes that the portfolio most likely to be affected will be up to 28% of the industry’s estimated turnover.

The companies surveyed said that about a third of the 28% potentially affected portfolio could potentially be substituted or redesigned. However, the ability of companies to substitute for potentially affected products will depend to a large extent on the details of the forthcoming regulations, on what may be technically and economically feasible and in particular on how customers will react to substitutes or revised composition. products. The areas most affected are expected to be adhesives and sealants, paints, cleaning products.

The President of Cefic Dr. Referring to CSS, Martin Brudermüller said: “The EU chemical industry supports the objectives of the Chemicals Sustainability Strategy, and we are ready to work with the Commission and the Member States to achieve the policy objectives, just as we are already working on. the climate change of our industry. The results of the first of a series of studies show that we have a huge challenge ahead of us. In order for the industry to transform, it needs a transition roadmap for the chemical industry. I call on European policymakers and governments of the EU Member States to work with us to turn CSS into a genuine Growth and Innovation Strategy. ”

The impact is estimated at a net market loss of 12% of the industry portfolio by 2040

The economic analysis concluded that, even taking into account the derogations, the net impact remains serious. Regardless of the scenario considered, the impact will represent a net market loss of at least 12% of the industry portfolio by 2040, according to the study.
Given that only two of the measures proposed by CSS have been evaluated so far, the cumulative impact of all the other changes proposed by the Strategy will be greater. The impact that these changes could have on chemical exports to the EU has not been considered, which could add to the overall impact.
“The role of the chemical industry is to provide its customers with vital materials to achieve the goals of the Green Agreement. The EU chemical industry is a major supplier to all manufacturing industries as well as key and strategic value chains, including pharmaceuticals, electronics, EV batteries, construction materials. “The policy changes anticipated by CSS will also create a significant ‘chain reaction’ in many chemical value-based value chains,” said Cefic President Dr. Martin Brudermüller.

The industry needs a predictable growth framework for the financial investments of the next two decades.

The proposed “route” should include timetables and measures for the industry to develop substitutes and focus on those products for which substitutes could be made available first. This rationale should be based on proven and established approaches, such as risk assessment based on REACH. Incentives will be needed to create markets for these new chemicals, coupled with a doubling of efforts to monitor the implementation of REACH and import safety legislation. This package should be complemented by a robust innovation program to accelerate the development of safe and sustainable design alternatives. Finally, the transition path must also address the other three transitions that the chemical industry must undergo – climate neutrality, digitization and cyclicality.

“The chemical industry is always driven by innovation, a passion for new technologies and an entrepreneurial spirit. The results of this study suggest that there may be an opportunity for a substitution effort across the industry to achieve the goals of the chemical sustainability strategy. However, there is great uncertainty as to how businesses along the value chain could achieve this in the current context. The industry needs a predictable growth framework for the financial investments of the next two decades. “To meet the many challenges of the Green Agreement, we need a strong transition path for the chemical industry,” said Cefic President Dr. Martin Brudermüller.

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