European states push Critical Chemicals Act

Led by Marc Ferracci, France’s minister for industry and energy, eight European countries have released a series of measures they want the European Union (EU) to adopt to protect the region’s ailing chemical industry.

Called the EU Critical Chemicals Act and outlined in a joint statement by the countries, the proposed legislation is a response to the European chemical industry’s lack of global competitiveness, a situation that has led to a series of plant closures across the region.

The EU Critical Chemicals Act would protect “building block” molecules considered important to the European chemical industry, the countries state. The act would replace current state aid rules so that countries can support the modernization of strategic facilities and protect manufacturers from high energy prices and low-cost products from competitors outside the region. Additionally, the act would foster R&D.

The countries have identified 18 chemicals that are critical to the region and need protection: ammonia, benzene, butadiene, chlorine, ethylene, hydrofluoric acid, lysine, methanol, methionine, phenol, propylene, silicon, sodium carbonate, sodium hydroxide, styrene, sulfur, toluene, and xylene.

“They form the building-blocks that are essential in the upstream to the defense, health, food, automotive, construction, green tech and other major industries—the absence of which could pose a threat to public and societal interests,” the statement says.

The measure would target plants that require investment for decarbonization and modernization and those that, if closed, would jeopardize European sovereignty. The signatory countries—Czech Republic, France, Hungary, Italy, the Netherlands, Romania, Slovakia, and Spain—propose that low-carbon replacements for the 18 chemicals are also strategic.

The countries say the act would work hand in glove with the Clean Industrial Deal, a package of measures that the European Commission announced in February to help all heavy industries decarbonize. The EU Critical Chemicals Act would be specifically tailored to the chemical industry, the signatory countries state.

The eight countries point to the 12% drop in European chemical production between 2019 and 2023 and say that 20 ethylene crackers could close by 2035, with the loss of 50,000 jobs, if the government does not act. The sector’s problems are mainly the result of high energy costs and “fierce, or even unfair competition from non-EU countries,” the countries state.

In an example of the European chemical industry’s struggle, Covestro and LyondellBasell Industries disclosed today that they will permanently close a jointly owned plant in Maasvlakte, the Netherlands, that makes propylene oxide and styrene. The closure is the result of “global overcapacities, persistently weak demand, and high costs in Europe,” Hermann-Josef Dörholt, head of Covestro’s performance materials business, says in a press release.