Ref. Ares(2021)2521207 - 14/04/2021
Meeting between Commissioner Breton and Cefic
10 Feb, 16:00 – 17:00
Chemicals Strategy, the Ecosystems and the Fit for 55% for the Energy Intensive Industries
BRIEFING NOTE (Commission Internal)
Scene setter/Context of the meeting:
Cefic has met with DG GROW three times recently (with DG K. Jorna
in December 2020 and January 2021, with DDG M. Rute in January
2021). They have met with EVP Timmermans and Commissioner
Sinkevičius, EVP Dombrovskis (on more general topics and economic
issues) and EVP Vestager (focusing more on COMP issues). In
addition, they wil meet/have met President von der Leyen on the 5th
As regards the Chemicals strategy for sustainability
, Cefic supports
its vision and objectives, but has been critical on the number of
legislative proposals announced. They consider that the strategy is
not specific enough on how innovation and the industrial transition
wil be supported. In their view, it lacks connection to the real-world
geopolitical context and is a missed opportunity for delivering on the
European Green Deal as growth strategy. Cefic’s major fear is that an
uncoordinated policy, combined with weak enforcement, risks
outsourcing the Green Deal technology solutions to other parts of the
Concerning Fit for 55
, Cefic and other Energy-Intensive Industries are
cal ing for an enabling regulatory framework and specific supporting
measures creating the framework conditions for the transformation
of these sectors. In particular, Cefic considers that the burden-sharing
between ETS and non-ETS sectors should be rebalanced and the
former’s share in the EU ambition should be reduced as industry is
exposed to global competition. It also cal s for a number of specific
reforms of the EU ETS and opposes its extension to transport and
buildings (i.e. under a common cap). As to the future Carbon Border
Adjustment Mechanism (CBAM), Cefic insists that it should be
complementary to (and hence not replace) the free al ocation
principle under the current ETS. It should also take into account the
specific characteristics of the chemical industry, in particular its
strong export orientation (requiring a mechanism that addresses the
additional cost for exports) and the presence of very long and
complex value chains (which cal s for a reasonable product scope of
the CBAMs and necessitates measures not entailing high compliance
costs or administrative burdens).
Objective of the meeting:
Listen to Cefic’s concerns and provide information on the latest state
of play on the different files. Invite Cefic to actively engage in the
implementation of the various policies and strategies.
Chemicals Strategy for Sustainability
• Our services have started the implementation of the chemicals
strategy. Impact assessments are being discussed and set up.
• We need your active participation. We wil set up a high-level
round table. The first meeting is expected to take place in March
• The industrial strategy puts the focus on industrial ecosystems.
This is a new approach and reflects the need for new ways of
thinking and working to lead the twin green and digital
transitions and to increase resilience.
Fit for 55 for energy intensive industries
• The EU strives to achieve its 55% emission targets reduction by
2030. We know this is challenging.
• Transitioning to a climate neutral and circular economy by 2050
will require full mobilisation of industry together with a
significant investment push. The chemical sector is of strategic
importance to the EU economy and this transformation.
Line to take
Chemicals Strategy for Sustainability
• The role of industry and innovation wil be crucial to succeed in
meeting the Green Deal goals and at the same time regain global
• The Chemicals Strategy measures boost innovation; they include
funding and investments for research and their
commercialisation and uptake.
• The Commission identified 14 industrial ‘ecosystems’,
representing around 90% of the business value added in the EU.
The chemical industry is part of the ecosystem of Energy
Intensive Industries and the Health ecosystem.
• The Commission wil publish the detailed definitions of the
ecosystems with the update of the Industrial Strategy in March.
It wil also explain how the ecosystem approach wil feed into
policy making as wel as the governance of these instruments to
make sure that al relevant stakeholders, including MS, can
contribute to the analysis.
Fit for 55 for energy intensive industries
• Hydrogen wil be crucial for decarbonisation of hard-to-abate
sectors, like chemicals industries. Following this most promising
pathway to climate neutrality wil require a substantial expansion
of generation capacities for decarbonised electricity and of the
infrastructure for its transportation. On 8 July, the Commission
released the Hydrogen Strategy and launched the European
Clean Hydrogen Al iance with an investment agenda to support
ambitious deployment of hydrogen technologies until 2030.
• As mentioned in March 2020 with the Industrial Strategy, a low-
carbon al iance can be considered as one of the possible
industrial alliances. It would be important for us to understand if
this is what the chemical sector actually wants or if there are
other solutions that you propose, to accelerate the green and
digital transition and to build resilience.
• If you consider that an important project of common European
interest (IPCEI) could be an alternative to the Al iance, please let
me and EVP Vestager know.
Defensives / Q&A
Chemicals Strategy for Sustainability
Q: The chemical industry wants to work constructively towards
realising the EU’s objectives, in particular the European Green Deal,
but is very worried about the cumulative impact of the multitude of
policy initiatives which are not al coordinated.
A: The Commission has assessed that there was no need for an
impact assessment on the Chemicals Strategy as a whole, as the
measures established were based on extensive evaluations and
consultations of our legal framework on chemicals.
However, we know it is important to guarantee coherence and
synergies during the implementation of the Strategy and its various
actions, and the High Level Roundtable will help us to regularly
discuss this with stakeholders.
I can also reassure you that the Commission as a whole is highly
committed to achieving the goals of the Strategy across policy areas,
and that internal coordination is fully in place to ensure coherence
and alignment of the upcoming initiatives announced under various
Q: Cefic is concerned that the Commission does not favor a sectoral
'green deal' approach for the chemicals industry because it is
worried about NGOs’ reactions.
A: The Chemicals Strategy integrates the main objectives of the
Green Deal into a holistic and coherent roadmap on where the
chemicals policy is moving to in the medium- to long-term to
support those objectives. It announces an overal consolidation and
simplification of the legal framework on chemicals and ensures
predictability through a clear timeline of upcoming regulatory
We are ful y aware that the chemicals industry is already committed
to support climate neutrality and circular economy, and we would
appreciate the same commitment on the objective of a zero
pol ution and toxic-free Europe, for which the chemicals industry
plays a key role. On our side, we have announced in the Strategy a
set of actions and incentives to promote the green transition of the
sector and of its value chain through various funding instruments,
and we are also engaging with Member States to make sure that the
transition to safe and sustainable chemicals is ful y mainstreamed
across EU funding programmes and national recovery plans.
How does the ecosystems concept differ from a traditional value
• The ecosystems encompass al players operating in a value
chain: the smal est start-ups and the largest companies,
research activities, service providers and suppliers.
Ecosystems, like in nature, are a matter of symbiosis (i.e. living
the digital transitions.
Fit for 55 – Energy-intensive industries
In the “Masterplan for a Competitive Transformation of EU Energy-intensive
Industries Enabling a Climate-neutral, Circular Economy by 2050”, the High
Level Group on Energy Intensive Industries has highlighted the need for rapid
progress on the demonstration of first-of-its kind technologies by 2030,
considering the short time left until 2050.
EII are therefore cal ing for an enabling regulatory framework and specific
creating the framework conditions for the transformation
of these sectors. The determining factors to al ow the green transition of
energy-intensive industries can be summarized as fol ows:
Abundant and affordable decarbonised energy, in particular electricity.
Net-zero emissions industrial production requires significant decarbonized
electrification and climate-neutral fuel switch, in order to get significant GHG
reduction after the year 2030 (e.g. net zero production of cement, steel and
chemicals in 2050 wil require 2 – 3.5 times more electricity than in 2015). It
needs to be available at the scale required, competitively priced and affordable
to support EU industry in its pathway towards climate neutrality.
Investments in production assets, R&I, demonstration and deployment
of new technologies and infrastructure
(e.g. electricity grids, energy system
infrastructures, energy storage technologies, CCUS and CO2 transportation
pipelines). In this regard, it is to be noted that investment cycles should also be
taken into consideration, as innovation wil not fol ow a linear path. Disruptive
breakthrough technologies, needed for the climate-neutrality objective, require
sufficient time to be developed, up scaled and commercialised.
Digitalisation and transformation of business models.
technologies can contribute to reduce 15-20% of total current CO2 emissions.
Lead companies in Europe are keen to launch a digital coalition to set their
carbon neutrality pathway, and it is the right momentum to build upon this
Foster demand for green products and competitiveness on export
European companies stil have a clear competitive advantage
compared to international competitors when it comes to the quality of the
products and their sustainability features. In order to strengthen this as a
market competitive advantage, we must create the conditions to massively
promote the uptake of sustainable products and to support companies and
sectors that export an important part of their production. This could be done
both through economic measures (like a CBAM that also includes export
rebates) but also through a wise trade policy, creating the conditions for our
companies to enter the future “green” markets in developing countries.
Recyclability and possible change in raw materials.
The transition to
renewable energy and digitalisation wil significantly increase the demand for
raw materials, not only for high-tech applications but also for infrastructure.
Europe is performing wel in terms of recycling of some materials. For other
materials, especial y those needed in renewable energy technologies or high
tech applications, secondary production represents only a marginal
contribution. A secure and sustainable supply of raw materials, both primary
and secondary, is paramount to enable the transition to a climate-neutral
In the light of al these critical factors, possible increase of EIIs’ carbon leakage
exposure should be assessed alongside
the revision of the 2030 climate targets,
as it is inherently linked to our climate targets. Carbon leakage measures
should be commensurate with and effective for the high level of pursued
When it comes more specifical y to ETS
, and in particular to effort sharing, EII
underline that it wil be particularly important to strike the right balance
between ETS sectors on one hand, where emissions have significantly reduced,
and non-ETS sectors on the other hand, which in many cases have seen a
stagnation or increase of their emissions. This wil be needed in order to
prioritise the sectors where most efforts to reduce GHG emissions are
• The COVID19 crisis, which exposed the interlinkages between the
economies and economic players along the value chains and beyond,
gave this new approach an even bigger “raison d’être” for the recovery.
• While preparing the needs assessment to inform our Recovery Plan, the
Commission identified 14 industrial ‘ecosystems’, representing around
90% of the business value added in the EU. They are fundamental y pan-
European and capture continental economic interdependencies in al
their complexities, ranging from manufacturing activity, to public and
private services, in both physical and digital realms.
• Ecosystems span across the EU Member States and involve al players
operating along the value-chain from the smal est start-ups to the largest
companies, from academia to research, service providers to suppliers.
Ecosystems can have very complex value chains involving a large number
of countries in and outside the EU. We have identified 14 industrial