Name of the Director who has cleared the briefing: C. Pettinel i
BASIS request ID: 7831
Participants:
Name of main contact person:
Fiche d'entretien
WHO
Cefic’s follow-up meeting with Ms Jorna to introduce new
WHEN
22 January, 15:30 – 16:30
WHERE
Video cal
WHY
Cefic has met with DG GROW already twice recently (December 2020 with you, and January
2021 with DDG Rute). In addition, they have met with EVPs Dombrovskis (more general
topics and economic issues) and Vestager (focusing more on COMP issues).
Cefic has been pushing for a quick setup of the high level round table for the
implementation of the chemicals strategy. An interservice discussion took place on this on
15th of January. Taking into account the time needed for launching the open cal (cal needs
to be open for at least 4 weeks), evaluation applications and selecting the members, the
most optimistic timing for the group to be set up would be end of March.
Topics suggested by GROW:
1. Chemical Strategy;
2. Greening industry (EIIs; hydrogen; HLG
EI /low-carbon al iance);
3. KPIs for industrial strategy
Topics suggested by Cefic:
1. Cefic President’s vision on the state of the industry, global
competition, COVID response and first insight in 2020 final impact;
2. The quest for
renewable electrons for industry (Hydrogen, Electrification, EEG and EEAG revision).
Feedback from meetings with EVP Vestager;
3. CBAM, ETS review and the chemical industry
– Cefic views and feedback on discussion with EVP Dombrovskis;
4. The chemicals strategy,
impacts and High Level Round table;
5. Industry progress on chemical recycling – plastic
recycling;
6. Recovery plans – Cefic experience and further advice the DG could give;
7. The
sectoral deal for chemicals/future chemicals deal = an integrated approach to these massive
changes for chemicals industry leading to a massive investment need. + Taxonomy and
REACH
MESSAGE
Chemicals Strategy – Chemicals Strategy, impacts and high level round table
• Our services have started the implementation of the strategy. Impact
assessments are being discussed and set up.
• We need your active participation. We will set up a high-level round table;
following our latest internal discussions the most optimistic timing for the
selection of the participants is end of March. A first meeting could take place
shortly after.
Greening industry – Energy intensive industries (EII), low-carbon alliance,
hydrogen, electrification, EEG and EEAG revision, CBAM, ETS review and the
chemical industry
• Reaching carbon-neutrality by 2050 is a tall order. A large part of the
decarbonisation rests on emission reduction technologies, which wil require
new infrastructure and significant investments in industrial facilities.
• The Commission has renewed the mandate of the HLG on EI to continue work
and provide input to the new Industrial Forum from this ecosystem.
CBAM (Carbon-border Adjustment Mechanism, Q2 2021)
Multiple position papers have been published in this regards, CEFIC specific on
12/06/2021 but also on the Review of ETS Free Allocation)
• We are aware of your industries position in regards to the CBAM and the key
principles you mentioned.
• The Commission is taking into account information and data facilitated by yours
and other EI s sectors.
Al iances
• The three most greenhouse gas emitting industries have developed a proposal
for a low-carbon industries alliance. The current proposal is too much focused
on IPCEI; clarity is needed on the governance of the alliance.
Name of the Director who has cleared the briefing: C. Pettinel i
BASIS request ID: 7831
Participants:
Name of main contact person:
• The Commission has renewed the mandate of the HLG on EII to continue work
and provide input to the new Industrial Forum from this ecosystem.
• We welcome Cefic’s active involvement in the EU Clean Hydrogen Alliance. The
importance of industrial use of clean hydrogen is also mentioned in the EU
Hydrogen Strategy. Member States have shown interest in financing Important
Projects of Common European Interest (IPCEI) in the hydrogen sector.
KPIs for industrial strategy
• In the March 2020 Industrial Strategy communication, the Commission
committed to monitoring the strategy’s implementation regularly” by tracking a
“set of Key Performance Indicators (KPIs)”.
• the Council Conclusions of 16 November 2020 cal ed on the Commission to
define key performance indicators for monitoring the industrial strategy and
competitiveness by the end of March 2021, and asked “for a regular reporting
on the key performance indicators in the form of a brief written report”.
• The updated industry policy will present a set of indicators monitoring the state
of the European Economy. Rather than presenting indicators by sector, the
Commission will work using the 14 ecosystems identified in May. The aim is to
include in the analysis also those economic activities that, although not being
classifiable as “industrial”, provide a fundamental contribution to industry: e.g.
professional services, research institutions etc.
• These indicators, on top of describing the ecosystems (e.g. in terms of size), will
help monitoring the impact of the COVID-19 crisis. Moreover, they will measure
the progresses made in terms of the green and digital transition.
Recovery plans
• Drafting national recovery plans is in the hands of Member States. When
reaching out to public authorities, companies and associations could stress the
transformative nature of the planned investments.
• The Commission wil assess these plans to ensure they contribute to the six
pillars of the RFF, the digital and green transition, growth, jobs, and economic,
social and institutional resilience of the Member State.
Chemical recycling – plastics recycling
• We appreciate Cefic’s work in the Circular Plastics Alliance to map the necessary
investments to reach the recycling target.
• This work serves as a basis for discussion with MS on how recovery plans can
help companies. As Portugal is the only Member State that joined the alliance so
far, the PT presidency offers a window of opportunity to initiate the discussion
at the Council.
Formaldehyde Limit Taxonomy and REACH
CEFIC might raise concern on formaldehyde emission limits in taxonomy, call for
coherence with REACH and invoke the One Substance – One Assessment approach
mentioned in the Chemicals Strategy (additional LTs in background if needed).
• We have raised the point with FISMA and are still discussing this matter.
Sectoral deal for chemicals
• The role of industry and innovation will be crucial to succeed in meeting the
Green Deal goals and at the same time regain global market.
• The Chemicals Strategy measures boost innovation, including funding and
investments for research and their commercialisation and uptake.
Name of the Director who has cleared the briefing: C. Pettinel i
BASIS request ID: 7831
Participants:
Name of main contact person:
Background
CEFIC supports the vision and objectives of the chemicals strategy for sustainability, in
particular the intention to strengthen enforcement of EU chemicals legislation, ensure a level
playing field for the industry and support innovation for safe and sustainable chemicals.
However, CEFIC has been critical on the number of legislative proposals announced in the
strategy to strengthen the protection of health and the environment from the most harmful
chemicals. They consider that a better balance should be struck between simply banning
chemicals based on their hazardous properties and enabling the technology solutions for the
future, and that the strategy is not specific enough on how innovation and the industrial
transition wil be supported.
CEFIC considers that the strategy lacks connection to the real-world geopolitical context and
that it is a missed opportunity for delivering on the European Green Deal as a growth
strategy. Its ultimate fear is that an uncoordinated policy combined with weak enforcement
risks outsourcing the Green Deal technology solutions to other parts of the world.
CBAM (Extracted from the CBAM Note)
Chemicals
As far as the chemical sector is concerned, our internal analysis (supported by a CEFIC
position paper) is that this is a sector particularly exposed to exports. Many basic substances
produced in the EU go to Asia where semi-finished products are made to be re-imported in
the EU for producing specialty chemicals, where the added value is; hence the problem the
sector potential y faces with CBAM. Therefore, the best solution would be one that
minimise the risk of retaliatory measures by trading partners and preserve the cost-
competitiveness of exports. Potentially there are many chemicals that could fall in scope of
the CBAM. The chemical sector has also been very vocal against the possibility to abandon
the system of free allowances and indirect cost compensation.
Name of the Director who has cleared the briefing: C. Pettinel i
BASIS request ID: 7831
Participants:
Name of main contact person:
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,
materials and products. Increased investment and innovative capacity of the chemicals
industry to provide safe and sustainable chemicals wil be vital to offer new solutions and
support both the green and the digital transitions.
Chemicals Strategy
The chemicals strategy, impacts and high-level round table
Contact:
The
Green Deal includes a Zero Pollution ambition and the Chemicals Strategy for
Sustainability is the first deliverable. It will be followed by a zero pollution action plan for
water, air and soil in 2021.
The Chemicals Strategy aims at better protecting citizens and the environment against
hazardous chemicals, encouraging innovation for the development of safe alternatives and
increasing global competitiveness of the EU chemicals industry.
In order to increase protection of health and the environment, the Commission proposes to
ban the most harmful substances from consumer products. Also very persistent chemicals,
such as the group
PFAS, known as “forever chemicals” are proposed to be banned. EU laws
will be strengthened to ensure that substances of concern are only al owed if their use is
necessary for health, safety or is critical for the functioning of society and if there are no
acceptable alternatives.
Name of the Director who has cleared the briefing: C. Pettinel i
BASIS request ID: 7831
Participants:
Name of main contact person:
In addition to protecting health and the environment, the strategy aims to
boost
innovation, promote competitiveness and increase the EU’s strategic autonomy. It wil
promote chemicals, materials and products that are safe and sustainable by design. It will
also promote and support the development of green and smart technologies and innovative
business models to enable the transition towards low-carbon and low environmental impact
manufacturing processes in the chemicals sector.
The strategy will promote the EU’s resilience of supply of chemicals used in essential
applications for society through EU funding and investment mechanisms. It wil establish
and update a research and innovation agenda for chemicals, to fil knowledge gaps on the
impacts of chemicals, and foster multidisciplinary research and digital innovations for
advanced tools, methods and models, also to reduce animal testing.
The EU regulatory framework for hazard and risk assessment and management of chemicals
is comprehensive and complex. A ‘
one substance, one assessment’ process will be
introduced to reduce the burden for al actors, enable more consistent and faster decision-
making.
The
enforcement of chemicals legislation wil be stepped up by strengthening the principles
of 'no data, no market', carrying out audits in Member States, and setting up uniform
conditions and frequency of checks for certain products. The implementation of the new
market surveillance Regulation this year as well as measures to reinforce the EU Customs
Union wil strengthen enforcement within the EU and at the external borders.
Formaldehyde limits – Taxonomy and REACH
• REACH establishes a transparent legal framework for setting restriction limits for chemicals that
includes risk assessment, socioeconomic assessment and takes into account feedback from
public consultations.
• There is an ongoing REACH restriction process for formaldehyde and formaldehyde releasers
that is currently in its final phase of assessment by ECHA.
• The Taxonomy DA is aimed to define sustainability criteria on economic activity level and it can
go beyond EU legislation. However, the criteria should be supported by sound justification or
scientific basis. There is no such justification provided for the proposed formaldehyde limit and
standard method.
• The inclusion of different limits combined with different standards in the taxonomy delegated
act and in REACH is a clear risk of conflicting limits and standards that will cause confusion for
companies, investors and consumers.
• The reference to formaldehyde should be aligned to the respective entry in Annex XVII of
REACH, same as it has been done for substances in Annex XIV (substances subject to
authorisation).
Name of the Director who has cleared the briefing: C. Pettinel i
BASIS request ID: 7831
Participants:
Name of main contact person:
Formaldehyde limits – taxonomy and REACH
The criteria for “do no significant harm” (DNSH) for pollution prevention and control for activities 7.1
and 7.2 in the taxonomy delegated act includes references to 2 hazardous chemicals i.e. asbestos
and formaldehyde.
Asbestos is banned by REACH. There is an ongoing REACH restriction process for formaldehyde and
formaldehyde releasers that is currently in its final phase of assessment by ECHA.
Once adopted, the Commission will prepare a restriction proposal under REACH which will establish
restriction limits. The aim of the restriction is to ensure protection of human health to
formaldehyde exposure in indoor environments, covering consumer articles but also some
construction products like wood panels.
The taxonomy delegated act is aimed to define sustainability criteria on economic activity level and
it can go beyond EU legislation to push for better sustainability production. However, the criteria
should be included following some justification or scientific basis. The draft delegated act includes a
limit is not consistent with the assessment done by ECHA under REACH.
Greening industry
Energy-intensive industries
Contact:
Energy-intensive industries (EI s), embedded in many strategic value chains, make up more than half
of the energy consumption of the EU industry. EI s produce goods and materials that enable
reduction of emissions in other sectors of the economy, including transport, construction and power
generation. Given the long investment cycles for these industries, meeting the 2050 targets requires
fast action.
The High Level Group on Energy-Intensive Industries, advising the Commission on policies relevant to
energy-intensive industries since 2015, developed a masterplan with recommendations to build the
policy framework needed to manage this transition while keeping our industry competitive. The
masterplan presents an integrated policy framework with recommendations to ensure that these
industries can contribute to Europe’s 2050 climate-neutrality ambitions. It outlines actions that
could provide the right market signals to attract new investments in Europe, help companies
implement cost-effective pathways towards climate-neutrality and seize new business opportunities
in Europe and abroad. The masterplan also focuses on the need to ensure a just transition and
considers the need to equip workers with new skil s and help communities dependent on these
industries to manage the transition.
Hydrogen, electrification, EEG and EEAG revision
Name of the Director who has cleared the briefing: C. Pettinel i
BASIS request ID: 7831
Participants:
Name of main contact person:
Contact:
EEG = (German) Renewable Energy Sources Act (DE: Erneuerbare-Energien-Gesetz)
EEAG = Energy and Environmental Aid Guidelines
• The chemical industry is an important player in the context of our hydrogen strategy,
both as a user of hydrogen and as a producer.
• The key objective of the European Clean Hydrogen Al iance is an investment agenda that
supports an ambitious deployment of hydrogen technologies, in line with the EU
Hydrogen Strategy to scale up the production of renewable and low-carbon hydrogen as
a tool to decarbonise energy-intensive industries and heavy mobility.
• Industrial use of clean hydrogen, including in the chemical sector, is an important part of
the hydrogen value chain and is expected to be the among the large hydrogen users in
the projects launched in the Alliance.
• Cefic has taken up responsibilities within the Al iance and is the supporting organisation
for the Industrial Applications roundtable.
• BASF is member of the hydrogen production roundtable, represented by
• The importance of industrial use of clean hydrogen is also mentioned in EU Hydrogen
Strategy. Member States have shown interest in financing Important Projects of Common
European Interest (IPCEI) in the hydrogen sector, and these large projects are also very
suitable elements for the project pipeline.
• 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.
CBAM, ETS review and the chemical industry
Contact:
CBAM = Carbon Border Adjustment Mechanism
ETS = Emission Trading System
• The EU chemicals industry’s total GHG emissions fell by about 60% since 1990, albeit on
a flattening trend, which indicates only smal reductions over the 2010s.
• Reaching the goal of carbon-neutrality by 2050 is a very tall order, given:
o the industry’s characteristics (since its products are made up of about 50%
carbon, full “decarbonisation” as such is intrinsically impossible);
o a significant expected increase of consumption, requiring a corresponding
increase of production (2.8 times, globally, by 2050);
Name of the Director who has cleared the briefing: C. Pettinel i
BASIS request ID: 7831
Participants:
Name of main contact person:
o the resources of the most accessible pathways to decarbonisation (in particular,
process and energy use optimisation) having already been exploited close to the
technological limits.
• It is estimated that about one half of the potential for decarbonisation by 2050 rests on
emission reduction technologies which have not yet reached the level of commercial
viability and are only expected to do so over the next 5-10 years or even later.
• Fully using the potential of these technological breakthroughs will require:
o new infrastructure and upgrades of the existing one;
o very significant investments in industrial facilities, preliminarily estimated at
between several tens and low hundreds of bil ions EUR annual y;
o ensuring an appropriate level of demand for products whose production cost is
expected to increase (sometimes significantly), including by avoiding that it gets
captured by high-carbon goods manufactured in less demanding jurisdictions.