Apocalypse now ?
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MAR / APR 2024
On 20 February , 73 industry leaders from 18 industrial sectors representing 7.8 million workers in Europe signed the ‘ Antwerp Declaration for a European Industrial Deal ’, which they addressed to Ursula Von der Leyen , President of the European Commission . Appropriately , though , it originated from the industry that underpins all industries , chemicals , and was drafted during the European Industry Summit at BASF ’ s site there .
Stressing the ongoing challenges of declining demand , stalled investments and “ significantly ” reduced production , BASF board chairman and CEFIC president Martin Brudermüller called urgently for “ decisive action to create the conditions for a stronger business case in Europe ”. BASF itself subsequently issued some results that graphically illustrate this ( page 7 )
The declaration outlines ten concrete actions , including integrating the EU Industrial Deal into the broader European Strategic Agenda , streamlining legislation and simplifying the state aid framework . It also stresses the need for affordable low-carbon energy , raw material self-sufficiency , fostering demand for sustainable products , nurturing innovation and the importance of the Single Market . You can read it in full at : antwerp-declaration . eu
One of the signatories to the declaration subsequently sent an open letter to Von der Leyen . Sir Jim Ratcliffe , founder and chairman of Ineos , spoke in far more direct language . “ This is the last chance to stop Europe from sleepwalking into off-shoring its industry , jobs , investments and emissions ,” he said .
Carbon taxes have been “ driving away investment ” from Europe , Ratcliffe continued . This is actually increasing Europe ’ s carbon footprint because it imports more from low cost energy markets like the US , where gas and electricity costs are 80 % lower .
Partly because of this , there have been no new large builds in Europe in the past 2 years . Ineos itself , he said , had a permit pulled from a planned € 4 billion petrochemical facility in Antwerp after a year , “ due to its nitrogen emissions , the equivalent of one family barbecue in a nature reserve once a year ”.
By contrast , the US has provided about $ 500 billion in incentives to invest in cleaner technologies through the Inflation Reduction Act ( IRA ). Under the present system , it is impossible to renew Europe ’ s 30-50 year old chemical base with new , cleaner technology . “ Unless the European government addresses high energy costs , carbon taxes and renewal there will be little left in another 20 years ,” Ratcliffe concluded .
Apocalyptic stuff . Is he right ? One might note that Ratcliffe did not mention the Single Market . Small wonder : he is a tax exile who personally backed Brexit , which is having a devastating effect on the UK chemicals industry , and adding costs and bureaucracy for every continental European company that wants to access the UK . He is also not endearing himself to me by investing in Manchester United , but I digress …
Whether the next 20 years do see a slow death of the European chemicals industry of just a continuing relative decline – in a world of supply chain insecurity , it is surely unthinkable that the former would simply be allowed to happen – the situation is undoubtedly serious . Europe is at a crossroads , bedevilled by the iron laws of unintended consequence , bogged down in yesterday ’ s thinking while the US powers ahead .
As chemical industry professionals , I think we all recognise both the industry ’ s gargantuan carbon footprint and that it remains essential for the development of environment-friendly solutions in pretty much every sector . Achieving Net Zero without chemicals , like modern life , in general , is unthinkable and it is better on every ground that they be produced here .
The EU cannot simply copy and paste the IRA . But it surely can and must do better .
Dr Andrew Warmington
EDITOR – SPECIALITY CHEMICALS MAGAZINE
SPECCHEMONLINE
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