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Ref. Ares(2022)1175871 - 17/02/2022
 
DG GROW 
Call between Commissioner Breton and European energy-intensive industries 
Online, 25 March 2021 at 10.00 
 
BRIEFING NOTE (Commission Internal) 
The energy-intensive industries (EIIs) are at the core of the real economy with 
links to each other and to key European value chains. This is your third call with 
the key EII 
 the previous calls took place on 8 and 20 of April 2020.  
This meeting with the energy-intensive industries will allow you to: 
x  Hear the EIIs’ expectations regarding the Industrial Strategy update; 
x  Discuss how the Fit for 55% package can support investment in clean 
technologies and provide effective carbon leakage protection; 
x  Check EII’s financial needs for the recovery and how to accelerate 
investment to EIIs’ green and digital transition. 
Running order 
o  Initial remarks by Commissioner Thierry Breton  
o  Updates by the EIIs on the above mentioned topics, chaired by 
Commissioner Breton. The speakers have coordinated their interventions 
(main topics mentioned in brackets), it would be important to respect the 
time limits (5 minutes each) to ensure that all topics covered. 
1. 
 
 
 
(Industrial Strategy, Low carbon products markets, Decarbonised energy) 
2. 
 
 
 
 
(Decarbonisation Roadmaps, Regulatory framework, Competitiveness) 
3. 
 
 
 
 
 
(Investments, Financing of breakthrough technologies) 
4. 
 EUROFER, 
 
   
(Carbon Border Adjustment Mechanism) 
5. 
 
 
 
 
 
 
(ETS, policy coherence) 
6. 
 
 
 
   
(Raw Materials) 
7. 
 
 
 

  
(Biomass, stability of sustainability standards) 
o  Discussion (15 minutes) 
o  Wrap-up & next steps (5 minutes) 
 

 

Key messages 
 
Introductory remarks 
x  Transitioning to a climate neutral and circular economy by 2050 
will require full mobilisation of industry together with a significant 
investment push.  
x  Energy intensive industries are at the core of the transition and 
supply many key industry sectors (automotive, construction, 
machinery, agriculture, health, etc.) and disruptions in these 
sectors have severely affected your companies.  
x  The Commission is updating Industrial Strategy to better respond 
to the impact of the pandemic but also due to the more ambitious 
2030 climate targets.  
x  I would like to hear today what are your expectations regarding 
the Industrial Strategy, what are key issues you would like to be 
covered. 
x  Relating to the new climate targets, I would like to hear your 
reflections on what it takes to  provide effective carbon leakage 
protection for your industries.  
x  The climate targets require accelerated investment in clean 
technologies. The funding under the Recovery and Resilience 
Facility provides an unprecedented opportunity for this:  
o  Have your industries had constructive dialogue with the 
Member States during the drafting of their national plans?  
o  How about the possible IPCEI on low-carbon industries, 
have you found interested Member States? 
o  What are your views on carbon contracts for difference or 
other temporary support schemes addressing OPEX. 
After intervention of Ilham Kadri 
x  You have often communicated that access to affordable, 
decarbonised electricity is one of the key issues for industry, to 
make the vast transformational investment to green production.  

 

x  Access to low carbon and affordable energy combined with 
creation of markets for low carbon products are key conditions 
for having a business case for transitional investments 
x  All policy tools available are to be used to create a business case 
for transformative investments at company level. 
x  We wish to provide you confidence that supply of clean energy will 
not become a bottleneck for industry’s green transition.  
x  This is of course a complex issue, but we wish to do the utmost 
with the industrial policy measures in our hands (public 
procurement to accelerate investment in renewable energy 
sources, standardisation to facilitate permitting, promoting 
production of renewable energy technology in the EU etc.) 
After intervention 
 
x  We  fully  share  your  views  on  importance  to  preserve 
competitiveness during the transition. 
x  Green and Digital transition offers great opportunities for Europe 
to strengthen its global competitiveness, the EU needs to shape 
these new markets and to exploit the first-mover advantage. 
x  Some Member States have drafted transition pathways together 
with industry stakeholders, to plan effective public measures. We 
are considering to introduce this idea as part of the industrial 
strategy, for each of the 14 industrial ecosystem.  
x  For the EII ecosystem this would not require much of additional 
effort, as many of your sectors have already conducted such work. 
Also the EIIs’ 2050 transformation Masterplan that was developed 
a year ago is still valid.  
x  The novelty would be integration of the digital dimension. I think 
the opportunities it could provide also for your industries to 
modernise operations and to create new business opportunities 
that have not been fully grasped.  
x  I would like to draw your attention to the upcoming Skills 
Roundtable. It is clear that the skills angle should not be forgotten 
as most ecosystems see lack of skills as a key bottleneck for dual 
transition going forward.  

 

x  On 10 of May, the (online) roundtable on skills in EII will take 
place. The roundtable is to prepare the ground for a skills 
partnership in EII sectors with a Charter to be signed in the future 
(2021/2022). 
After intervention 
 
x  Creating business case for transformative investments at company 
level and addressing investment challenge of dual transition are 
the key task going forward. 
x  The Recovery and Resilience Facility provides a unique opportunity 
to  accelerate  the  twin  transition,  funds  should  be  used  in  most 
efficient way. 
x  Innovation is crucial for keeping a competitive edge. With targeted 
innovation in key technologies such as renewable hydrogen, the 
EU  will  be  able  to  scale  up  in  the  markets  that  are  expected  to 
grow globally in the coming years. 
x  The transition will require cooperation and pooling of resources as 
in the case of hydrogen and batteries. My understanding is that 
EIIs are leaning towards preparation of an IPCEI for low-carbon 
industry, we will follow with interest this new development. 
After intervention 
  
x  I believe 
 was planning to talk about ETS, let us take 
CBAM and ETS point together as they are closely interlinked.  
After intervention 
 
x  I share your views that industrial transition requires creation of 
the new predictable policy framework. 
x  Currently, the Commission plans to table a proposal for a CBAM by 
June 2021. Already in December 2019, in the European Green 
Deal, the Commission announced it will make a proposal for a 
CBAM for selected sectors in 2021. 
x  Commission services are completing a thorough assessment of 
impacts of various options for establishing a CBAM, such as a tax 
at the border of the EU, an internal carbon excise charge, or a 
system  of  mirroring  the  EU  ETS,  as  well  as  coherence  and 

 

complementarity with other measures under the European Green 
Deal, notably the revision of the EU ETS. 
x  I know you already exchanged views with DG GROW services on 
this point. Indeed it would be important for us to have a good 
understanding of how you see these two instruments working 
together, especially in the view of a possible phasing out of ETS 
free allocations and also keeping into considerations indirect costs. 
I think the timing of CBAM entry into force is also an aspect to 
carefully consider. 
After intervention 
  
x  Importance of Raw materials for dual transition and resilience of 
our industrial ecosystems is well understood and reflected in our 
Industrial policy.  
x  Implementation of the Critical Raw Materials action plan is among 
the key deliverables in this regard.   
After intervention 
 
x  There is clearly the need for coherence among the measures, 
including continuity and predictability on various issues like 
treatment of free allowances in the ETS reform and treatment of 
biomass.  
x  We will follow biomass issue closely during the revision of the 
Renewable Energy Directive.  
Wrap -up 
x  We had a good exchange of views and would like to continue this 
dialogue, including through the High Level Group on Energy 
Intensive Industries
, the fora that proved very useful for enabling 
transition of EIIs. High Level group was renewed last year and the 
selection of members to reflect better ecosystem approach was 
finalised earlier this month. 
 

 

Defensives / Q&A 
 
QuestionWhat are your views regarding chemicals industry’s call 
for a sectoral Green Deal for chemicals (to help fulfil the enabling 
role of Europe’s chemical industry)  

Answer: The Commission is not in favour of a sectoral green deal 
since  the Chemicals Strategy integrates the main objectives of the 
Green Deal into a holistic and coherent roadmap on the future of 
chemicals policy. The Strategy announces a set of actions and 
incentives to promote the green transition of the sector and of its 
value chain through various funding instruments. It also seeks the 
engagement of Member States to ensure the mainstreaming of the 
transition to safe and sustainable chemicals across EU funding 
programmes and national recovery plans. 

Question:  What are your views on the adoption of the 2030 
climate targets? 

Answer: The objective of the 2030 Climate Target Plan, adopted on 
17 September, to adapt the current 2030 targets is to prepare the 
EU for the transition towards climate neutrality by 2050. This will 
be done by proposing a plan to increase the EU’s GHG emission 
reductions target for 2030 to at least 55% (as compared to 1990 
levels) in a responsible way and assessing its feasibility as well as 
economic, social and environmental impacts. To deliver these 
additional reductions, the Commission will, by June this year, 
review and propose to revise where necessary, all relevant climate-
related policy. These concrete measures that will need to be 
developed to achieve intended climate objectives will be subject to 
detailed impacts assessments. 

 
 
 

 

Question:Would the Commission authorise contract for difference 
for low carbon steel?  

Answer:  The issue of contract for difference is one of the topics 
included in the revision. Stakeholders were asked for feedback on 
the possibility to allow decarbonisation support through carbon 
contract for difference and on their advantages and 
disadvantages. The Commission is still reviewing contributions.  

Carbon contract for difference are contracts between the 
beneficiary and a counterpart (generally mandated by the State) in 
which the beneficiary is paid for each ton of CO2 emission avoided 
per ton of product that he produces an amount of money 
corresponding to the difference between his CO2 emission 
avoidance costs and the price of ETS allowances.   

Contract for difference can strongly affect the functioning of 
markets. They also provide beneficiaries with important 
competitive advantages as they can shield beneficiaries from 
market fluctuations and market risks. Support through carbon 
contract for difference should therefore be assessed with care and 
would in any event have to be subject to important safeguards like 
competitive bidding across sectors to ensure that amount of aid 
and competition distortions are limited to the minimum as well as 
mechanisms ensuring that beneficiaries remain exposed to market 
signals. Also, it must be ensured that CO2 emission reductions 
materialise and are not just displaced to another sector. Finally, 
scheme design must ensure that the aid covers only extra 
environmental costs but does not lead to capacity increase or cover 
costs that the company would have to incur anyway. A 
decarbonisation scheme meeting those conditions has recently 
been approved by the Commission (Dutch SDE++ decarbonisation 
scheme).    

 
 

 

Question:   How will the CBAM articulate with the EUs present 
emissions trading scheme (where ‘free allowances’ currently 
compensate certain sectors)? 

Answer:  Over time, the CBAM could replace measures that 
currently address the risk of carbon leakage under the EU ETS. The 
CBAM is not designed to protect European industry from 
competition but rather to ensure the environmental integrity and 
effectiveness of EU climate policies as they apply to its trade-
exposed industries.  

The design of the CBAM will complement the EU’s carbon pricing 
policies (in particular the EU ETS) which will remain the 
cornerstone of the EU’s climate policies. The EU internal market 
will stay open to foreign competition under the applicable rules. 

The EU is a staunch defender of rules-based trade order and will 
comply with its international obligations and the rules of the World 
Trade Organisation (WTO) in particular.  

 
Question: What will the CBAM scheme look like? 
Answer:  There is a breadth of considerations that need to be 
reviewed in the design and implementation of a CBAM. 
Commission services are completing a thorough assessment of 
impacts of various options for establishing a CBAM, such as a tax 
at the border of the EU, an internal carbon excise charge, or a 
system of mirroring the EU ETS. The assessment of the options will 
not only look into their economic, social and environmental 
impacts, but will also consider feasibility and practical 
implementation, administrative burdens and compliance costs.  

 
 
 

 

Question: What will it cover? How will the scope of affected 
products be decided?  

Answer:  The assessment also includes a careful and impartial 
selection of sectors and products that should be subject to the 
CBAM from the outset, reflecting also the possibility of extending 
the scope to other products later in the implementation.  Indeed, 
clear and stable investment climate is necessary to make the 
appropriate carbon-abatement investment decisions. 

 
Question: When will it be unveiled? When will it take effect? 
AnswerCurrently, the Commission plans to table a proposal for a 
CBAM by June 2021. Already in December 2019, in the European 
Green Deal, the Commission announced it will make a proposal for 
a CBAM for selected sectors in 2021. 

According to the agreement signed by European Council the 
European Parliament and the Commission on 16 December 2021, 
CBAM revenue should be in place in 2023.  

 
Question: How is the Commission preparing the proposals? Are 
there consultations with partners? 

Answer:  As part of the impact assessment, the Commission has 
consulted citizens and stakeholders and encouraged them to give 
their views on the best option to enforce ambitious policies against 
climate change in an open economy while addressing the risk of 
carbon leakage.  The Commission received contributions coming 
from 38 different countries. In line with our commitment to 
transparency the inputs for the consultation were published on the 
Commission’s central consultation page on 6 January 2021. 

A thorough impact assessment is ongoing, examining economic 
efficiency, environmental, social and financial impacts of the 


 

various options for a CBAM and their feasibility as well as 
coherence and complementarity with other measures under the 
European Green Deal, notably the revision of the EU ETS. Any 
proposal will have to respect the WTO rules and our trade 
agreements, as well as other international commitments. 

Following the presentation of a legislative proposal, the EU will 
continue to be ready to engage in discussions with its partners in 
the WTO and other fora. This will enable taking account of 
legitimate concerns from trading partners. This engagement could 
also include discussions on how to ensure proper cooperation as 
regards measures taken by countries to tackle carbon leakage. 

 
 
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Background information 
Name of Cabinet Member: Joan Canton 
Name of the Director who has cleared the briefing: Joaquim Nunes de Almeida 
BASIS request ID: (CAB BRETON/800) 
Room, time: online, 25.3.2021 at 10.00 
Participants: 
from EII sectors and managing directors of the corresponding sectoral EII 
associations (will attend in listening mode). 
Name of main contact person: 
 GROW I.1 
 
 
EIIs Overview 

Energy-intensive industries (EIIs)1 are the key enablers for the transition of the EU’s 
economy to climate neutrality and for achieving goals of the Green Deal.  
European EIIs ecosystem provide direct employment to around 8.3 million people and 
contribute to around 4.87% of EU value added. EIIs have 15% share in total EU greenhouse 
gas (GHG) emissions and are main industrial GHG emitters and energy consumers. EIIs are 
closely interlinked between themselves and other key value chains and sectors. EIIs are the 
potential driving force in greening the respective value chains (both upstream and 
downstream) and providing necessary economies of scale for kick starting new markets 
(hydrogen, etc.). 
Substantial changes in the policy framework are needed to ensure the right conditions and 
business case for the transition of the EIIs to climate neutrality. The most important issue is 
the lack of a business case for EIIs transition to climate neutrality, as clean products will cost 
more to produce (higher Opex) and will require significant upfront investments (higher 
Capex).  
The new Industrial Strategy announced an industrial alliance on low-carbon industries to 
pool resources for demonstrating breakthrough technologies at industrial scale, but EIIS 
signalled recently preference for IPCEI and started discussions with MS. The High-Level 
Group on Energy-intensive industries has been the key forum for the dialogue with the EIIs 
regarding the transition to climate neutrality. In November 2019 the High-Level Group on 
Energy-intensive industries issued an Industrial Transformation Master Plan on how and 
under which conditions these industries could transition towards climate-neutrality and 
circularity by 2050. 
 
What EIIs propose/need for their recovery after the COVID-19 crisis 
x  Boost Major Infrastructure projects 
These can create demand for many foundation products from large and small EII 
companies, steel, metals, concrete, plastics, bitumen, etc. and fuels for logistics & 
construction  
x  Boost Public procurement 
                                                 
1 The most energy-intensive industries in the EU are steel, chemicals, cement, refining, ceramics & refractory, 
ferro-alloys & silicon, fertilizers, glass, lime, non-ferrous metals and pulp & paper. 
11 
 

Build strategic stocks across EU of pandemic response materials and other critical 
industrial products; Maintain demand for some products to stop plant shut-downs, with 
knock-on effects for other products 
x  Ensure Health of Automakers, Parts and Engineering/Manufacturing Industries 
Restore demand for Steel, Aluminium, plastics, textiles, electronics, etc. 
x  Protect and Support SMEs 
They are vital for transport, construction and services for many major projects, but 
extremely vulnerable now.  
x  Work on developing/filling the policy gaps, Industry Master Plan vs Green deal 
including: 
The creation of lead markets for low-carbon products;  
o  mapping future infrastructure needs 
o  Inclusive of wider range of industrial technologies  
o  planning for access to abundant, affordable and sustainable energy and materials 
o  revision of State Aid rules 
x  Try to achieve long term regulatory stability and predictability 
To rebuild some loss of confidence from international investors in the EU economy 
 
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 calling for an enabling regulatory framework and specific supporting 
measures
 creating the framework conditions for the transformation of these sectors. The 
determining factors to allow the green transition of energy-intensive industries can be 
summarized as follows: 
• 
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 will 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, to be noted 
that investment cycles should also be taken into consideration as innovation will not follow a 
linear path. Disruptive breakthrough technologies needed for the climate-neutrality 
objective require sufficient time to be developed, upscaled and commercialised. 
• 
Digitalisation and transformation of business models. Current digital 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 initiative.  
• 
Foster demand for green products and competitiveness on export markets. 
European companies still have a clear competitive advantage compared to international 
12 
 

competitors when it comes at 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 are 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 will significantly increase the demand for raw materials, not only 
for high-tech applications but also for infrastructure. Europe is performing well in terms of 
recycling for some materials. For other materials, especially 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 economy. 
 
In the light of all 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 climate ambition. 
When it comes more specifically to ETS, and in particular to effort sharing, EII underline that 
it will 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 will be needed in 
order to prioritise the sectors where most efforts to reduce GHG emissions are necessary. 
 
European Hydrogen Strategy (8 July 2020) 
The Hydrogen Strategy considers in particular the potential of renewable hydrogen potential 
to decarbonise difficult sectors like industry and transport, but at the same time helping to 
manage our electricity system and providing storage. Today, hydrogen is mainly a feedstock 
in industry and is produced from natural gas. In the future, hydrogen will become a new 
clean energy carrier, along with electricity. 
Hydrogen and renewables are expected to be part of several of the national Resilience and 
Recovery Plans
, while several Member States have also presented, or are working on, their 
own hydrogen strategies and respective budgets to support them. 
The European Clean Hydrogen Alliance, launched on 8 July, is open to all stakeholders that 
wish to contribute to strengthening of the European hydrogen capacities in concrete large-
scale projects. It will support the necessary investments along the whole hydrogen value 
chain to build up a robust project pipeline for clean hydrogen in Europe. The proposed 
recovery package, Next Generation EU, like the general budget, will have earmarked funds 
for delivering the climate goals of the European Green Deal. The Commission will closely 
work with Member States to ensure that there is a strong emphasis on hydrogen related 
projects in the national measures. The Strategic Investment Facility that the Commission 
proposed will be able to unlock 150 billion euros to invest in key technologies and value 
chains, like hydrogen technologies. 
 
The European Clean Hydrogen Alliance 
The six thematic roundtables of the European Clean Hydrogen Alliance will elaborate a 
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project pipeline that delivers on the 2030 objectives of the EU Hydrogen Strategy and 
strengthens the EU dimension and industrial capacities. Some of these hydrogen projects 
will require public investments from a number of Member States to be viable. 
In preparation of large collaborative multi-country projects, several Member States have 
launched national calls for expression of interest for a hydrogen Important Project of 
Common European Interest (IPCEI). On December 2020, 22 Member States and Norway 
signed a manifesto for the development of a European clean hydrogen value chain, 
recognising the importance of promoting cross-border collaboration and of working on 
large-scale joint investment projects in order to support the development and deployment 
of hydrogen technologies and systems. Industrial applications of hydrogen are explicitly 
mentioned in the scope. 
Replacing fossil energy by hydrogen generated with renewable energy enables significant 
decarbonisation of the chemical sector.  
The value chain for hydrogen needs to be built at the same time as the industries transition 
to use renewable and low-carbon hydrogen, so that sufficient quantities of renewable and 
low-carbon hydrogen will be available at an affordable cost. This requires significant 
expansion of renewables capacities and potentially also imports of renewable and low-
carbon hydrogen. 
 
CBAM 
The European Green Deal underlined that “should differences in levels of ambition 
worldwide persist, as the EU increases its climate ambition, the Commission will propose a 
CBAM, for selected sectors, to reduce the risk of carbon leakage
”. Indeed, a pillar of the EU 
climate policy is carbon pricing in the form of the EU Emission trading system (EU ETS). 
However, as long as international producers do not incur costs comparable to the EU’s, there 
is  a  risk  of  carbon  leakage  either  because  production  is  transferred  from  the  EU  to  other 
countries with lower compliance costs for greenhouse gases (GHG) emissions reduction, or 
because EU products are replaced by more carbon intensive imports. A CBAM that places a 
comparable price on selected imported products can contribute to mitigating the risks of 
carbon leakage. 
The European Green Deal Communication and the European Council conclusions of 12 
December 2019 provide the main context and background for this initiative. It has been 
confirmed by the proposal for a European Climate Law and with the 2030 Climate Target 
Plan to reduce GHG emissions by at least 55% compared to levels in 1990. This will be 
brought together under the ‘Fit for 55 Package’ which will cover, in particular, the review of 
sectorial legislation in the fields of climate, energy, transport, and taxation, alongside the 
proposal for a CBAM, as laid down in the Commission Work Programme 2021.  
The aim of a CBAM is to ensure that reinforced internal EU decarbonisation efforts, through 
measures aiming to help meet the temperature goals of the Paris Agreement, do not 
engender counterproductive effects at the global level. It should be seen as a necessary 
element of the tool box designed to ensure the environmental integrity and effectiveness of 
EU’s climate action. The measure will be designed in full compliance with WTO rules. In any 
case, before developing, proposing and adopting the CBAM, the European Union should 
consult with its trading partners.  
In the interinstitutional agreement on budgetary matters signed on 16 December with the 
European Parliament and the Council, the Commission committed to propose an own 
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resource based on CBAM. However, the budgetary potential of the measure is not an 
objective in designing the measure nor in selecting the sectors. It is important to pass the 
message that the main objective is and will be the fight against climate change
.  
Skills Roundtable.  
x  On 10 of May, the (online) roundtable on skills in EII will take place. The roundtable is to 
prepare the ground for a skills partnership in EII sectors with a Charter to be signed in 
the future (2021/2022). 
x  We expect participations of high-level representatives of the EII ecosystem -
 of 
large (multinational) companies and SMEs, social partners, regional cluster and 
vocational education and training (VET) provider. 
x  The primary objectives of the roundtable of 10 May will be to: 
o  Discuss the challenges within EII ecosystem in terms of upskilling and reskilling to 
support the shift towards the green and digital transition; 
o  Identify the scale and type of support needed for skills development at the 
European level and, in particular, how the Pact for Skills can support skills needs 
in EII sectors; 
o  Obtain commitments from the participants regarding their contribution to the 
Pact for Skills in EII sectors. 
 
Biomass and sustainability 

x  New issue that EII 
 will raise - concern about EC plans on biomass in RED. EIIs are 
concerned that European Commission’s modelling is wrong as it only assumes big 
future need from power sector, ignoring its use as feedstock in EIIs like chemicals or 
steel  
x  EIs are also concerned about the big NGO campaign on toughening up sustainability 
criteria in the Renewable Energy Directive (38K campaign replies organised by NGOs).   
 
EU Chemicals industry 
Chemical manufacturing is the fourth largest industry in the EU and 59% of chemicals 
produced are directly supplied to other sectors, incl. health, construction, automotive, 
electronics, textiles.  
 
Global sales of chemicals were EUR 3347 billion in 2018, and is expected to double by 2030. 
However, the EU’s global sales share is on the decline. With a forecast of moving from 2nd to 
3rd position by 2030, being overtaken by the US while China remains number one and on the 
rise.   
EU chemicals industry: facts and figures 2018 (Source: Cefic) 
Turnover 
EUR 565 billion 
Direct jobs 
1.2 million 
Number of companies  26 600 
Capital spending 
EUR 21 billion 
R&D investment 
EUR 10 billion  
Global sales share 
16.9% 
 
Chemicals will be a key enabler for the European Green Deal as chemicals are the building 
blocks of low-carbon, zero pollution and energy- and resource-efficient technologies, 
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materials and products. Increased investment and innovative capacity of the chemicals 
industry to provide safe and sustainable chemicals will be vital to offer new solutions and 
support both the green and the digital transitions. 
 
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 will be 
supported. It lacks connection in their view to the real-world geopolitical context and it is a 
missed opportunity for delivering on the European Green Deal as a growth strategy. Cefic’s 
ultimate fear is that an uncoordinated policy combined with weak enforcement risks 
outsourcing the Green Deal technology solutions to other parts of the world. 
 
Concerning Fit for 55, Cefic and other Energy-Intensive Industries are calling 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 calls 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 concerns the future Carbon Border Adjustment 
Mechanism (CBAM), Cefic insists that it should be complementary to (and hence not replace) 
the free allocation 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 calls for a reasonable product scope of the 
CBAMs and necessitates measures not entailing high compliance costs or administrative 
burdens).  
Their position is that: 
• 
Europe’s chemical industry will be key to build the solutions needed for 
climate neutrality (e.g. for insulation panels, wind turbines, electric batteries), for 
which toxic chemicals are needed,  
• 
the chemicals industry needs support in order to decarbonise its own 
production processes.  
• 
CEFIC has called for a sectoral Green Deal for chemicals to help fulfil the 
enabling role of Europe’s chemical industry. This sectoral deal for chemicals is 
presented as an integrated approach to the massive changes for chemicals industry 
leading to a massive investment need. 
 
EU Fertilisers industry 
According to Eurostat and the Fertilisers Study2, the EU fertiliser market, is an economic 
sector that has between EUR 20 billion and EUR 25 billion in annual turnover.  
 
Around 95 000 to 100 000 jobs (expressed as Full Time Equivalent) are involved: i.e. 
approximately 1% of European Gross Value Added for the whole manufacturing sector and 
0.2-0.3% of the workforce in manufacturing.IIn the inorganic fertilisers (which are 
international trade commodities), large companies represent 75% of the total market value 
and 75.000 employees for a turn-over of EUR 9.8 billion according to FE. 
                                                 
2 http://ec.europa.eu/enterprise/sectors/chemicals/files/fertilizers/final_report__23jan2012_en.pdf. 
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The inorganic fertiliser’s business represents 80% of the EU fertiliser market. The main 
building block for the production of these fertilisers is ammonia, which is made of nitrogen 
and hydrogen. Currently, roughly 70% of hydrogen feedstock is produced from natural gas 
through reforming, thus generating large amounts of CO2, which is reused to some extent 
(dry ice, food/beverages…). This can be changed to hydrogen from electrolysis of water. 
Switching from today’s hydrogen production to ultra-low-carbon hydrogen would allow to 
eliminate GHG emissions either entirely or in large part. 
 
The use of electrolytic hydrogen as a feedstock for ammonia production is currently at 
demonstration stage. 
Ensuring abundant green hydrogen is a big challenge, because it takes 6-8 times more 
energy to make hydrogen from water than from natural gas or oil. Another hurdle to 
overcome is the much higher production cost for ammonia if it were to be produced today 
with this low-carbon technology: at least two times higher than the fossil alternatives under 
current conditions. 
Moreover, ammonia also provides a promising carrier for the transportation of hydrogen - 
that would be thus bound in bigger molecules which are easier to transport. 
 
 

 
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CVs of the interlocutors
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