EPCA ’21: EU to push ahead with further chemicals regulation – Commission

MADRID (ICIS)–The EU’s executive body is to push ahead with further chemicals regulation and make overseas competitors also comply with it, rather than lowering its standards to remain competitive, an official at the European Commission said on Wednesday.

Diederik Samsom, head of cabinet with the Commission’s vice president Frans Timmermans, in charge of the Green Deal and climate policy, said the key for the EU’s petrochemicals industry and wider manufacturing sectors was to go further and ahead than other regions, rather than imitating them.

Samsom was taking part in a round table at the 55th European Petrochemical Association (EPCA) annual conference with chemicals executives; the EPCA meeting is being held virtually for the second year.

In a heated debate with the CEO of Germany’s chemicals major BASF, Martin Brudermuller, also the president of the European trade group Cefic, Samsom said the petrochemicals industry should expect an extension in chemicals regulation to further narrow down the use of toxic chemicals in products manufactured or sold in the 27-country bloc.

“Buckle up because it is coming. In Europe, we have a tradition to regulate the way we make our products,” said the EU official.

“The power of the EU is not an army, because we don’t have one. The power of Europe is our consumption market, one of the biggest in the world, and we have something to say on how products are done all over the world. To enter this market, you need to comply [with our regulations].”

Samsom, who got a fierce response from BASF’s Brudermuller on how the European chemicals industry is losing market share globally because it is becoming uncompetitive, conceded that some measures to be adopted could hurt competitiveness.

One measure, especially, is causing friction between regulators and industry: the Carbon Border Adjustment Mechanism (CBAM) which charges for greenhouse gas (GHG) emissions, which cause global warming.

The EU is committed through the Green Deal to decarbonise its economy by 2050, in line with the 2015 Paris Accord that seeks to limit global warming to 1.5 degree Celsius by 2100, compared to pre-industrial levels.

But the EU official said the loss of global competitiveness due to certain regulations would be nothing new for European manufacturing.

The EU official conceded that regulation cannot run too far ahead competitors because that would “kill your own industry” but it can go “a bit further” than others, and your industry can thus become a global leader, he said.

“Yes, the CBAM is not going to create a perfect level playing field. We are not able to create an administrative monster regulation where we can control everything coming from China. But we can do this with basic raw materials, or fertilizers, or cement [for example], and therefore is not a perfect protection,” said Samsom.

“So, we’ll end up in a situation where Europe has a competitive disadvantage, which is exactly the situation Europe has been in the last 150 years: we have been at the forefront of regulation in pollution, human rights, social discrimination. The abolition of child labour, for instance, increased costs for industry, but Europe became a thriving continent.”

As recycling and plastic waste stands as one of the most pressing challenges the petrochemical industry is facing, Samsom said it will not be enough to ramp up recycling capacities, but said a new approach on designing materials was needed to achieve true circularity.

The EU official said he often hears chemicals executives saying they need long-term planning as their plants are built with decades-long running operations: the uncertainty of completely shifting an economic model based on fossil fuels to a green one may be too much to take in.

Without going into much detail, he cited a Chinese proverb: “The best day to plant a tree was 30 years ago. The second-best day to plant a tree is today.”

However, he admitted that many countries around the world are yet to fully commit to policies to fight off global warming.

He said China is showing “some ambition, but we are waiting for a little more” and called on big polluters like India, Indonesia, Saudi Arabia, or Mexico to be fully on board the Paris Accord commitments as the world prepares to meet in Glasgow in November for another Conference of the Parties (COP26) on climate change.

Front page picture: European Commission’s head for climate policy Frans Timmermans speaking to reporters in Brussels in July
Source: Stephanie Lecocq/EPA-EFE/Shutterstock