INSIGHT: Effort needed to link EU chems to industrial strategy

11 February 2011 17:27  [Source: ICIS news]

By Nigel Davis

LONDON (ICIS)--Europe’s chemicals makers caught the ear of Brussels in 2007. The High Level Group [HLG] on the Competitiveness of the European Chemicals Industry drew upon the views and expertise of a broad range of stakeholders over a period of 17 months to peer into the future for the sector.

Called a “once in a decade opportunity”, the HLG process was extraordinary enough and provided a clear opportunity for CEOs and other industry advocates to air the real issues that have an impact on Europe’s competitiveness. The politicians and bureaucrats listened. An HLG report spawned some EU-wide and member state action and the momentum, generally, has not been lost.

But the industry needs to step up a gear, trade group Cefic’s president, Giorgio Squinzi, said this week.

“I remain confident that there is a future for Europe as a chemicals production platform, provided we take the right actions quickly,” Squinzi told a conference held to look at next-step developments in the HLG process.

The HLG recommendations should be linked to the EU’s new flagship 2020 strategy initiatives on industrial policy, resource efficiency, innovations, skills and trade policy, he said.

Maintaining those strategy and policy links is vitally important in a fast changing world.

An industry hit hard by the financial crisis and the recession faces the prospect of slow growth and relative decline. Upstream particularly, its producers are troubled by eroded trade competitiveness and structural change. Europe is losing ground to the emerging economies as a producing and consuming region for chemicals.

It is not simply a case of output getting back to where it was before the recession. China and other fast developing parts of the world have captured a greater share of the sector and will continue to do so. Fast growing economies need chemicals of all sorts and the innovation and skills that underpin them.

Europe can look towards its own strength in these important fields but has to develop the ways in which business is done.

“One of the strong points of the European chemical industry is its integration with research and innovation networks and clusters, including the related value chain,” Squinzi said. And he believes that clusters are an untapped strength that could be pushed further.

A report from the European Commission released at the start of the month on the progress made on HLG objectives thus far says that implementation is still rather uneven.

“There have been a lot of new developments in innovation policy and networks, initiatives to better interlink energy infrastructures and to more concretely identify and address trade barriers.

"On the other end, progress in other areas such as intellectual property rights, global or sectoral agreements on climate change, transport and logistics, or multilateral trade negotiations has been slow,” it said.

Adopting coherent policies on some of these issues has been a challenge across the 27-member EU but the HLG strategy objectives sit clearly now within the EU’s industrial policy goals.

“It is crucial to keep a healthy and competitive chemicals industry in Europe, not only for the purpose of keeping the jobs and the market leadership for the chemical industry itself but also to keep the knowledge leadership for the whole industrial value chain,” the Commission’s vice president, Antonio Tajani, said on Thursday.

The industry is a cornerstone of manufacturing and one of the most important sources of innovation for the development of new materials, products and processes, he added.

The Commission is listening to the industry and appears encouraged by its support for the innovation partnerships it is promoting to get ideas to market faster.

Tajani said there are also specific funds available to promote the substitution of hazardous substances under the EU’s Framework research programmes, for the strengthening of the EU’s chemicals clusters and for the international promotion of Reach.

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By: Nigel Davis
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