INSIGHT: Reach to breathe fresh Europe debate

03 January 2007 11:32  [Source: ICIS news]

By Nigel Davis

 

LONDON (ICIS news)--EU chemical policymakers have had their hands full with Reach for years but in 2007 their attention turns to the sector’s longer term future.

 

Not that Reach, the region’s new all-embracing chemicals policy, will not have a significant impact on industry competitiveness. Depending on which side of the divide you sit it will either help enhance companies’ global effectiveness and innovative capacity or destroy it.

 

Everyone in chemicals knows, however, that, Reach notwithstanding, a great many policy issues have a direct impact on the sector.

 

The European Union (EU) last year launched its high level group on energy, competitiveness and the environment. In the short lifetime of that policy advisory group the debates have ranged from nuclear energy and renewables to emissions trading.

 

Importantly, the chemical industry has made sure its views were heard.

 

The new high level group on chemicals will be launched this year after Reach comes into force and will demand significant industry attention. Fireworks can be expected from the start: the group will involve all industry stakeholders.

 

Yet, as the industry knows, this is an opportunity not to be missed. Slow off the mark with Reach, chemical companies and their representatives have to be up to speed with what is likely to emerge from Brussels that will ultimately directly affect business.

 

The traditional chemical industry is globalising fast with much of the mainstream manufacturing migrating to Asia. Low cost producers, particularly in the Middle East are having a profound affect on the balance of supply and demand.

 

Yet beyond these strong undercurrents shareholders are demanding more from companies in terms of performance and social responsibility.

 

Leaders of the chemical industry hardly sparkle yet neither do their counterparts on the European political scene.

 

So who trusts chemical producers and what they do and how does Europe sustain a sector that is widely seen as one of the region’s most competitive?

 

Simple answers should not be expected. Industrial policy has to give industries the room to face new challenges and to grow whilst helping them align with society’s aspirations.

 

The EU is firmly wedded to sustainable development. Indeed the drive for greater sustainability lay behind much of the thinking on Reach.

 

Sustainability will be a cornerstone for the high level group on chemicals. Its debates and reports will turn on what may and what may not be sustainable over the longer term.

 

Medium to long term threats to the sector in Europe are well known; the longer term opportunities less widely discussed.

 

Chemical creativity lies at the heart of the current scientific era as Nobel laureate Jean Marie Lehn has suggested. Companies have to grasp the opportunities and EU industrial policy has to help make that worth their while.

 

Let’s hope creativity drives the chemicals HLG and not deeply entrenched views that favour one segment or policy direction or another.

 

Prepare for the new great European chemicals debate. It will surely set the scene for the sector’s future.

By: Nigel Davis
+44 20 8652 3214

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