Europe’s chemical industry will largely be wiped out within 10 years unless policies change to support it, writes Jim Ratcliffe, chairman of the European chemical giant Ineos, in a stinging letter to European Commission President José Manuel Barroso.
New technology “will not save it,” Ratcliffe writes. In the U.K. alone, 22 chemical plants have closed since 2009, he states.
The EC insists it is not letting the chemical industry down. “We are very well aware of the difficult situation of the chemicals industry in Europe,” an official tells C&EN. The EC says it is pursuing actions on feedstock costs, energy prices, and regulation burden to help European industrial competitiveness.
The region’s industry has certainly been stagnant in recent years. CEFIC, Europe’s leading chemical industry association, says production in 2013 didn’t budge compared with 2012 and was 6.4% below the level reached in 2007, the year before recession set in.
According to Ratcliffe, European chemical companies won’t be able to compete over the long term because of high energy and feedstock prices. Natural gas in Europe is three times as expensive as gas in the U.S., while the U.S. also enjoys half the electricity costs, he maintains.
Ratcliffe had still more harsh words for Barroso, but his frustrations likely extend beyond energy costs for industry: Ineos’s proposed merger of its polyvinyl chloride business with that of Solvay is being scrutinized by the EC for its potential impact on competition.