EU emissions proposals damaging, firms may relocate – Cefic

LONDON (ICIS)–The European Chemical Industry Council (Cefic) will continue lobbying for a change in the EU’s Emissions Trading System (ETS) proposals presented by the Commission in July as they still could discourage investment and cause chemical companies to relocate elsewhere, its director general said.

Hubert Mandery said the July proposals lacked “fresh thinking” on the ways the EU should manage its greenhouse gases emissions. Cefic’s main interest now lies in finding support from the 28 EU member states for benchmark producers to be granted free allowances for direct emissions.

Cefic was one of the trade groups which at the date of publication warned the proposals were not enough for energy-intensive sectors to stay profitable.

“We fully admit climate change needs to be fought [but] we also need incentives to innovation in Europe, not disfavour energy-intensive investors like chemicals or fertilizers. If they do not get allowances [for emissions] why would they invest in Europe and not in Turkey or any other country outside the EU,” said Mandery.

However, Cefic’s director general said the Commission, unable to reach an agreement among the member states, left the decision to decide on what a “benchmark producer” is to the 28 countries, not an idea scenario for a single market, he said.

“Politicians in Brussels understand our demands. The idea of ‘let China produce and we buy its products’ is no longer valid: climate doesn’t care about the place where the emissions take place,” said Mandery.

Following on that reasoning, Cefic’s director general said he is  hopeful technology starts to provide the tools to translate renewable energies into chemicals.

“We definitely need these type on industries in order to make a transition to low carbon economy,” he said.

Hubert Mandery also showed expressed concern about the next phase in the application of the REACH regulation, to start in 2018, when companies producing chemicals in quantities of one to 10 tonnes will be evaluated.

“There are clearly substances [amounts] which don’t justify this kind of effort for registration. We would expect the deadline of 2018 to put pressure on small producers, especially in central and eastern Europe. But REACH is there and we need to make it work,” he said.

Speaking at the sidelines of the Sustainability Dialog event organised by Swiss chemical major Clariant in Frankfurt, Germany, on 2 September, Mandery said the concept of sustainability has three dimensions, all equally important.

“Green doesn’t necessarily mean sustainable. The first dimension [is] chemical safety, followed by the resource efficiency dimension, which in turn can also lower the input cost bill. Finally, and linked to the previous dimension, is profitability,” said Mandery.

Recognising the challenges the chemical industry is facing in Europe are large, Cefic’s director general said during the last years the organisation has detected a change in the public opinion’s perception of chemical companies as they are starting to be seen as agents of innovation, which can help achieve the needed change to a low carbon economy.

“This [change of perception] is not just due to the bankers having messed it up for obvious reasons. I think we starting to be considered as agents of change, bringing innovation. One can see the change of perception even in the institutions: five years ago everything concerning the sector was about safety, today is much more,” concluded Mandery.

Interview article by Jonathan Lopez