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Finance

Europe’s chemical industry seeks green recovery funding

Green Recovery cash could accelerate the sector’s environmental transformation

by Alex Scott
September 16, 2020 | APPEARED IN VOLUME 98, ISSUE 36

CEFIC, Europe’s leading chemical industry association, is calling on the European Commission to allocate a share of Europe’s proposed $875 billion COVID-19 Green Recovery fund to the chemical industry to help it recover from the pandemic and simultaneously transform itself into a more environmentally sustainable business.

$875 billion

The proposed budget for the European Commission’s Green Recovery fund.

Over the next few years, the Commission plans to make about $455 billion in recovery funds available in the form of grants and another $420 billion as loans.

A cash injection would help Europe’s chemical sector offset its economic woes. The region’s chemical output dropped 5.2% from January to June 2020, compared with the year-ago period, following the outbreak of COVID-19 in the region, according to a new economic report from CEFIC. Europe’s manufacturing output overall dropped 12.9%.

The chemical industry also faces rising costs from Europe’s environmental policies, including those resulting from the Commission’s proposal to deepen the region’s greenhouse gas emission cuts to 55% by 2030 compared with the level in 1990. The current target is 40%.

The window of opportunity is now, CEFIC argues. “Crucial decisions are currently being made across European capitals to steer the Recovery Plans towards a more resilient Europe,” René van Sloten, CEFIC’s executive director for industrial policy, says in a statement. “To enable a low-carbon transition of our industry, which is vital to so many sectors, we call for strategic investments in circular economy, renewable energy and clean hydrogen, along with green infrastructure and transport.”

CEFIC’s call for healthy slice of the Green Recovery fund to be directed toward renewable energy and green transport is seconded by the European Environment Bureau (EEB), which represents more than 140 environmental groups across Europe. EEB, though, is skeptical about the Commission’s willingness to act. “Positive high-level rhetoric needs to be matched by ambitious concrete commitments,” the bureau says in a statement.

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