European Commission pushes for stronger and more innovative industry
The EC Communication entitled Investing in a smart, innovative and sustainable Industry: A renewed EU Industrial Policy Strategy reiterates its ambitious goal of increasing the industry share in EU’s GDP up to 20% by 2020. Petrochemicals Europe welcomes the EC blueprint that will make Europe’s industry stronger.
The EC Communication draws a list of existing and proposed measures, which will enable the EU to reach that goal. The petrochemical industry is likely to benefit from initiatives that will help complete the single market, accelerate progress towards a circular economy, stimulate investment in research and innovation, relieve the regulatory burden and create “a global level-playing field in bi- and multilateral trade negotiations”.
“The new Industrial Policy Strategy we are presenting today will help our industries stay or become the world leader in innovation, digitisation and decarbonisation.” said Juncker during his State of the Union speech. One of the main objectives of this strategy is to facilitate investment in sustainable technologies. The petrochemical industry as an enabler industry can contribute to this objective by providing the building blocks to innovate in low-carbon technologies.
The European petrochemical industry faces fierce international competition since it is a commodity business and customers buy on price. The industry is confronted with higher energy and feedstock prices than in other parts of the world and these costs represent around 80% of total production costs. The regulatory burden is also heavy. As demonstrated by the Cumulative Cost Assessment study commissioned by the EC, over 25% of the profits of European petrochemicals are currently absorbed by regulatory costs and these costs doubled between 2004 and 2014.
Therefore, making sure that trade agreements apply the principle of “reciprocity” is vital for the European industry to be able to compete on an equal footing with the rest of the world. Global competitors should comply with the same regulation as European companies when they import substances and goods into the EU. The objective of the Commission “to ensure that new legislation delivers its objectives at least cost” is also essential for the petrochemical industry.