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The right formula for Europe’s chemical industry

Photo: All rights reserved © Yvan Dubé -

Medieval alchemists sought to turn copper into gold. Even though modern-day chemists focus their research on different objectives, the compounds and materials they produce are truly awe-inspiring and are the bedrock upon which one of Europe’s most important, innovative and competitive industries is built. As the sector is now facing the realities of a new decade, the European Commission has taken initiatives to encourage all involved actors to join forces to boost the competitiveness of the European chemicals industry and to fully use its potential to resolve the societal challenges identified in the Europe 2020 strategy.

In medieval times, alchemists were sought to transform base copper into splendid gold. This age-old quest does not appeal to modern chemists, but today’s chemistry has led to the development of a seemingly endless array of substances, compounds, materials and processes that truly glitter in their usefulness and importance. To recognise and celebrate this, 2011 has been declared the International Year of Chemistry.

In fact, the chemical industry today is a major sector of the European economy, and counts as one of the EU’s largest manufacturing industries. According to the European Chemical Industry Council (Cefic), the sector generated around €450 billion in sales in 2009 and European Commission figures show that the chemical and related industries employ some 1.2 million European in 29 000 companies. In terms of productivity, the sector comes second of all manufacturing sectors in terms of value-added per employee. Moreover, the chemical industry is what is known as an ‘enabling’ sector because it provides innovative materials and technological solutions for other industries, such as through bio-chemistry and nano-materials.

Nevertheless, the financial and economic crises have hit the sector hard. For example, the industry shed 59 000 jobspdf(251 kB) Choose translations of the previous link  in 2009 alone. But things are looking up. In the first 11 months of 2010, sales in the EU chemical industry rose by 17% compared with the same period in 2009. In roughly the same period, the sector recorded a trade surplus of nearly €43 billion.

Despite its obvious competitiveness, the European chemical industry is facing major challenges in the form of fierce global competition, uncertainties relating to a secure and fair access to energy and raw materials, and new regulations. The industry is rising to these challenges through structural change and innovation.

Charting a course ahead

EU policy seeks to ‘future-proof’ the chemical industry, which represents an important and integral component of the Union’s ‘Integrated industrial policy for the globalisation era’, one of the Europe 2020 strategy’s flagship initiatives. As an intermediate goods industry and solution provider for almost all industrial value chains, the sector has enormous potential to improve both the competitiveness and environmental performance of downstream industries through innovation in substances and materials, the document outlining the new policy described.

In fact, a Commission-appointed independent High-Level Group on the Competitiveness of the European Chemicals Industry highlighted a number of potential contributions the sector could make to finding solutions for critical societal challenges facing the EU, such as strengthening its innovative power to allow European industry to compete on global markets, to tackle environmental sustainability and resource efficiency, and to contribute to healthy ageing by developing materials for medicines, medical devices or other tools.

More broadly, in 2009, the group issued a set of 39 recommendations aimed at bolstering the competitiveness of the European chemicals industry and targeted at all relevant stakeholders, including the industry itself, the EU, national governments and regional authorities. That same year, the Union’s Competitiveness Council invited the Commission, Member States and industry to implement these recommendations.

Turning recommendations into action

The European Commission has released a report on progress towards the implementation of the group’s recommendationspdf(251 kB) Choose translations of the previous link , the findings of which were presented at a major conference in Brussels on 10 February 2011. “I think we are moving forward in the right direction and we are doing this together,” Commission Vice-President Antonio Tajani, who is in charge of industry and entrepreneurship, said at the gathering.

Most of the actions and initiatives are mid to long term and so it is still too early to draw conclusions. However, the report has already identified a wide range of activities taken by public authorities and private stakeholders to implement the recommendations.

In Germany, authorities, industry, and universities have developed several initiatives to increase children’s and students' interest in science and chemistry. In the United Kingdom several networks and centres to encourage innovation have been established. Italy has supported experimental projects to develop innovative products and processes aimed at eliminating ‘substances of very high concern’, as defined in the REACH regulation.

Seven European regions in Germany, Poland, the Czech Republic, Slovakia, Hungary and Italy have launched a joint project to improve framework conditions for supply chain management in Central and Eastern Europe.

Belgium and the Netherlands have launched a project to set up a pilot plant to scale up bio-based processes to prepare them for industrial applications, which will serve as an open innovation centre for commercial companies and research institutes looking to develop new bio-based activities.

Industry has also been busy taking action. For instance, Cefic used the High-Level Group’s recommendations to draw up a road map for its members. “A significant number of actions have already been taken on the recommendations falling within our responsibility,” explained Cefic President Giorgio Squinzipdf(24 kB) Choose translations of the previous link , adding that “We need to step up a gear.”

The European Commission announced its intention to carry on the implementation of the High-Level Group’s recommendations in the coming months, starting with a special focus on innovation and human resources.

Strengthening the research-innovation bond

Research and innovation are the lifeblood of the chemical industry. This explains why the sector is one of the highest private investors in research and development.

The EU funds chemicals-related collaborative research through the Seventh Framework Programme (FP7) and namely its nanosciences, nanotechnologies, materials and new production technologies (NMP) theme. This component of the programme aims to boost the competitiveness of European industry by increasing its knowledge intensity, with a special focus on dissemination of research results to small and medium-sized enterprises.

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