Editorial: A midyear check-in

The year is half over, and Independence Day just passed, so it’s a good time to think about the direction of the chemical industry in the US. And, perhaps, the direction of the US itself.

The direction of the industry was just laid out in a midyear outlook report from the American Chemistry Council (ACC). As I report in a news story on page 13, the trade association expects US chemical production to fall 1.6% this year—a pretty dyspeptic performance. Modest growth should resume in 2024.

The ACC cites high interest rates and low housing starts as two reasons for the lackluster performance. It also offers advice to policymakers of the sort you would expect from an industry group. Among other things, it wants the US to improve the Environmental Protection Agency’s New Chemicals program, streamline the energy permitting process, and adopt better policies for shipping.

I imagine many company executives feel that impediments to the chemical industry’s growth were lower during the Donald J. Trump years than they are in the Joe Biden administration. It’s pretty clear that regulators now feel more empowered to crack down on hazardous chemicals.

Similarly, in May, the agency proposed new rules that would regulate carbon dioxide emissions from power plants fired by coal or natural gas. Similar rules were proposed under Barack Obama’s administration but then dropped by Trump.

But, even in a Democratic administration, US regulations are nothing like those in most European nations. True, politics in some individual countries, like Finland and Italy, are tipping rightward. The general European tenor, though, is of much more regulation and state oversight of the chemical industry.

Take per- and polyfluoroalkyl substances (PFAS). The EPA is tightening the screws, for sure, setting ultralow drinking-​​water limits for certain PFAS. And, as Britt Erickson reports on page 19, the agency is establishing a framework for companies that want to win approval for new PFAS.

In contrast, the European Chemicals Agency has proposed banning PFAS almost completely, even when they are high-molecular-weight polymers that, according to industry representatives, are not mobile, bioavailable, or bioaccumulative.

The regulatory differences between the US and Europe around greenhouse gases are stark as well. Yes, the EPA has proposed regulations on power plants. But at the same time, the Inflation Reduction Act (IRA) incentivizes cutting CO₂ in the US with payments of up to $85 per metric ton to capture and sequester the greenhouse gas.

In Europe, meanwhile, the Net-Zero Industry Act, the European Commission’s answer to the IRA, does not include incentives for carbon capture and utilization, an omission that the European Chemical Industry Council, a trade group, says is in keeping with Europe’s all-stick-and-no-carrot approach to decarbonization.

Attitudes toward nuclear energy, a stable source of low-carbon energy, also diverge sharply. In the US, the Department of Energy advocates for nuclear power. Dow, the largest US chemical company, is even planning to install a small, modular nuclear reactor in Seadrift, Texas, to supply low-carbon electricity for its plant.

In Europe, in contrast, nuclear energy is on the decline, with the notable exception of France. Germany, the continent’s biggest chemical producer, closed its last nuclear power plant in April. Spain and Switzerland plan to phase out nuclear power by 2030. Add in Europe’s struggles with natural gas, and it’s not surprising that some big European chemical companies are rethinking their European investments.

Yes, chemical industry executives might have fond memories of the regulation-​averse EPA under Trump. But my opinion is that the Biden administration occupies a reasonable middle ground between the laissez-faire attitude of the Trump administration and Europe’s more heavy-handed approach to regulation. So, as we pass the midyear point and, in the US, celebrate our independence, I for one think we are headed in the right direction.

Views expressed on this page are those of the author and not necessarily those of ACS.