Transcript World chemicals sales in 2014 are valued at € 3.232 billion. The

Industrial
Renaissance
2nd Slovenia 5.0 Strategy Conference
11 December 2015
René van Sloten
Asian chemicals production outpaces
other regions
Chemicals sales (€ billion)
Rest of Europe
EU
NAFTA
551
528
China
98
Japan
1,111
India
121
142
South Korea
Rest of Asia
72
413
151
44
Latin America
Rest of the world
World chemicals sales in 2014 are valued at € 3.232 billion. The European
Union accounts for 17% of the total
Source: Cefic Chemdata International
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EU chemicals sales increased by 80% in 20
years, while its world market share nearly halves
Source: Cefic Chemdata International
Page 2
The world landscape of the chemicals
industry is changing rapidly!
“13th Five-Year Plan”
• From “following the lead”
to “taking the lead” and
from a big country of
petroleum and chemical
industry to a “great
power”
• Leading on technology
innovation and trade
• Prevailing in international
markets
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Trends in overall growth expected to
continue
2014
2030
Growth in post-recession Europe remains low, mainly due to mature
markets and an ageing population
Source: Cefic Chemdata International and Cefic analysis
Page 4
What does this mean for Europe and its
chemical industry?
. In 2011, Europe had the highest plant closure rate in the world
(72% of closures).
Source: Roland Berger
Page 5
Overall, Europe’s chemical industry decline is the
result of a number of structural drivers
Source: Roland Berger
Page
Can we remain Competitive?

Large integrated domestic
market with strong customer
industry clusters
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
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
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High international orientation
and global networks to external
customer industries

Skilled and motivated workers
and scientists
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Constant adaptation to
globalised markets
Strong innovation efforts will
generate new growth clusters:
Efficient Energy use, health
and new materials which could
solve upcoming societal mega
challenges

High energy and feedstock costs
High Regulatory Compliance Costs
(eg REACH)
Lack of a “Common Industrial Policy”
or a “Common Energy Policy”
Non-energy raw material availability
and cost issues (eg. biobased
feedstock, rare earths, minerals)
Mature market, ageing population,
risk aversion of societies
Page 7
Advantaged energy and feedstock prices
are a clear enabler of competitiveness
Page 8
Energy intensity slashed in half during 23
year period
The use of combined heat and power units, a shift to higher value-added, lower energyintensive products, have all contributed to our energy efficiency gains
+71%
-24%
Page Page
9 9
Energy costs: a competitive disadvantage
The ETS principle: Sectors at risk of carbon leakage should receive
100% allocation of allowances up to benchmark levels of carbon
efficiency.
• If undertakings meet the benchmarks, and cannot avoid carbon
costs by becoming more efficient, those costs are “undue”.
• If these undertakings cannot grow without incurring carbon
costs, those costs are “undue”.
The proposals would require even those undertakings that can
meet the revised benchmarks to either reduce production or
purchase allowances.
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Recommendations
• The reformed ETS should provide incentives for undertakings to become “best
performers”. It should not impose cost penalties on “best performers”.
• The reforms should look to the actuality and be founded on facts.
• The current proposals introduce an arbitrary threshold of eligibility for full
protection: arbitrary changes to the benchmarks: and arbitrary limitations on
dynamic allocation.
• They will result in undue costs for energy intensive industries, and a further
disincentive to investment and growth at benchmark levels.
• We look to the Council and the Parliament to amend these proposals to provide
– A carbon leakage list and benchmarks based on real data rather than assumptions
– Dynamic, production-based allocation with a sufficient reserve for growth.
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Cumulative cost assessment on chemical industry
shows high regulatory burden
Page 12
Cost evolution over time is steadily rising
Mostly driven by chemicals and industrial emissions legislation, and to a lower
extent by energy legislations at the end of the period
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Cefic position on Better Regulation (1/3)
I. Cefic welcomes the Commission’s Better Regulation Package
(19.5.2015), in particular:
•
emphasis on the evaluation of existing legislation (rather than new legislation)
•
need for evidence-based regulation
•
systematic consideration of competitiveness impacts in all impact assessments
•
proposal to introduce independent quality checks on major amendments adopted by
the European Parliament and the Council during the legislative process
and underlines that:
•
better regulation is not deregulation
•
good legislation is clear, consistent and predictable – it effectively delivers on policy
objectives at the lowest cost
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Cefic position on Better Regulation (2/3)
II. It identifies the current challenges specific to the chemical sector:
•
High burden : EU chemicals policy = ‘Top 10’ most burdensome areas of EU law
•
Complexity of legal framework, causing high potential for inconsistencies and overlaps
•
Implementing measures of EU existing legislation lead to substantially
disproportionate results (e.g. REACH Authorisation, ED, ETS)
•
Isolated Member State initiatives (cf. national nano registers, national restrictions)
•
Cumulative cost of legislation
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Cefic position on Better Regulation (3/3)
III. Cefic addresses 3 main demands to the European Commission:
1. make burden reduction results more tangible
-
COM REFIT programme lacks concrete objectives to measure progress
2. systematically assess the impact on innovation of new policy initiatives
3. extend Better Regulation policy beyond traditional law-making
-
COM is focussed on improving the EU law-making process, but relevant EU
rules are increasingly adopted outside the legislative procedure (cf. EU
implementing acts, guidance, action programmes)
Page 16
Sustainability challenges are business
opportunities
Health &
Nutrition
9 billion people will live
on earth by 2050!
 How can we guarantee
Construction
& Housing
food and water supply
for everyone?
 What does future
architecture look like?
 What are possible bene-
 Which materials
fits and contributions
of plant science?
Energy &
Resources
50% more primary
energy needed in 2030!
 What is the ideal energy
mix of the future?
 How big is the stake
of renewable energy?
67% of the world
population will live
in cities by 2025!
are needed to make
energy consumption
more efficient?
Mobility &
Communication
1.2 billion cars will drive
on earth by 2020!
 How can we reduce
emissions and fuel
consumption ?
 What will future cars
be made off ?
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What to do – « Age of application » can contribute to
European growth and further improved sustainability
Page 18
Finding a new balance –
opportunities in the context of the Circular Economy
Source: Roland Berger
Page 19
And how do we define circular economy?
For us the circular economy is part of a strategy
aimed at making Europe more resource
efficient, by both avoiding unnecessary
material and energy losses throughout the lifecycle of products and maximizing value by
keeping resources circulating in loops many
more times than today.
“The European
chemical industry is
supports the
transition towards a
circular economy.”
Today, the chemical industry delivers already
many contributions to the circular economy,
because they make business sense:
• Enabling technology and products
• Process design in manufacturing
Page 20
Policies enhancing the competitiveness of the
EU chemical industry
• Co-ordinated energy policy delivering affordable energy
• Responsible climate policy
• Innovation policy
• Regulatory stability and consistency
• Open markets
• Access to raw materials
• Addressing skills and people mobility
• First class logistics
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