European industry “at a breaking point”, Cefic warns

Cefic has launched a new competitiveness study by Advocacy, which it said shows that the European chemical industry “is at a breaking point”. It found among other things that over 11 million tonnes/year of capacity at 2021 were announced to be closed in 2023-2024. 

“For the sake of our industry and the 1.2 million of workers it directly employs, we need bold and urgent action today,” commented Cefic director general Marco Mensink. “Lowering energy costs, ensuring access to critical raw materials, and fostering innovation are absolutely critical.” Without the industry, entire value chains including  healthcare, automotive, renewable energy and emerging Green Deal technologies. 

The study explored how the EU chemical industry compares competitively with the US, China, Japan, Brazil, India and the Middle East, and the main cost and non-cost drivers for competitiveness in Europe. It concluded that the EU industry’s competitive position has weakened significantly, “often resulting in delayed investments or decisions to invest outside of Europe”. 

The warning was echoed by Ineos and its CEO Sir Jim Ratcliffe (pictured) as ethanol production ended at the giant Grangemouth site in Scotland, leaving only one such site in Europe. Due to energy costs five times higher than in the US and carbon taxes adding a further 10% to costs, Ineos claimed that the UK cannot compete.  

“Deindustrialising Britain achieves nothing for the environment,” Ratcliffe said, calling for an energy policy that ensures competitive pricing and a carbon trading regime that supports industry as well. “It merely shifts production and emissions elsewhere. We are witnessing the extinction of one of our major industries as chemical manufacture has the life squeezed out of it.”