EPCA '21: EU chemicals needs to engage with policymakers on meeting climate challenge

Author: Nigel Davis

2021/10/05

LONDON (ICIS)--The chemical industry is massively challenged by the EU’s Green Deal and needs closer political engagement now to understand how the 27-country bloc’s climate change goals might be achieved, the CEO at Germany’s chemicals major BASF said on Tuesday.

Martin Brudermuller, also president of the European chemicals trade group Cefic, said the chemicals industry needs to “engage in the how”.

In a pre-recorded keynote address to the virtual 55th European Petrochemical Association (EPCA)  meeting, he said: “We have to talk about what are the framework conditions to make this [the Fit for’55’ goals] happen.”

The EU’s Green Deal and the ‘Fit for ‘55’ package, which runs to 3,000 pages, is the cornerstone of the EU’s climate change initiative. The bloc aims to decarbonise by 2050 to slow down global warming, in line with the 2015 Paris Agreement.

“It is all about competitiveness,” he said, referring to the burden of additional costs that will fall on petrochemical producers as they sanction the capital expenditure (capex) needed for further emissions abatement while encountering higher operating costs, particularly the cost of renewable electricity at the national level.

The challenge will be global, Brudermuller suggested, as large companies reduce CO2 across their portfolios, and countries like China and the US move forward with climate change initiatives.

“It is pretty amazing what is going on in China. I can see China moving very, very fast and also [being] pragmatic,” he said.

The set of interconnected proposals included in the Fit for 55 package, according to Cefic, strengthens eight pieces of existing legislation and presents five new initiatives across a range of policy areas and economic sectors.

The industry must talk about the how to ensure that it is not investing in projects that will not be uneconomic, Brudermuller said.

Sector players also need clear direction on what sort of support might be expected as the energy transition is achieved.

“A lot of the new technologies that are coming are actually a challenge in economic terms,” Brudermuller said.

A later speaker at the EPCA online event pointed to a study which has shown that electrifying the current chemical industry in Germany would require about 630 terawatt hours per year of power.

That is equivalent to the entire consumption of electricity within Germany today and an increase of electricity consumption by the sector by a factor of 10.

The EPCA annual conference is the key petrochemicals industry networking event. For the second year, COVID 19-related travel restrictions have led to a fully virtual event

Front page picture: A storage tank at BASF's flagship facilities by the River Rhine in Ludwigshafen, Germany
Source: Ronald Wittek/EPA-EFE/Shutterstock