The European chemical industry is one of the most competitive and successful industries, embracing a wide field of processing and manufacturing activities. It is the foundation of the European continent’s economy. The European chemical industry is a wealth generating sector and a valuable part of Europe’s economic infrastructure as it provides modern products and materials and also enables solutions to virtually all sectors. The chemical industry plays an essential role in European economic development and wealth sector as its research centres, logistics chains and factories are available across the continent. And these are enabling manufacturers to turn out their products that keep us safe, clean, and comfortable in their homes with improvised ideas and clever materials.
In 2018, the total turnover of the EU28 chemical industry was €507 billion, the number of companies was 28,329, total capital spending was worth of €21.7 billion, R&D investment was €9.1 billion and the total number of direct employees was 1,140,000. The EU chemical industry ranks second by sales; including non-EU countries total European chemicals sales reached €597 billion in 2016 or 17.8 per cent of world output. The EU chemical industry aims to provide solutions for the achievement of a competitive, low carbon and circular economy in the country. Below are some major European countries’ chemical industry details:
Turnover – €70 billion
Number of Companies – 3,335
Direct Employees – 165,000
National Contact – Union des Industries Chimiques (UIC)
Turnover – €184.7 billion
Number of Companies – 2,000
Capital Spending – €7.4 billion
R&D Investment – €10.5 billion
Direct Employees – 447,064
National Contact – Verband der Chemischen Industrie e.V. (VCI)
Number of Companies – 250
R&D Investment – CHF 7 billion
Direct Employees – 70,000
National Contact – ScienceIndustries
Turnover – €59.5 billion
Number of Companies – 3,460
Capital Spending – €4.7 billion
R&D Investment – €6.3 billion
Direct Employees – 140,000
National Contact – Chemical Industries Association (CIA)
Turnover – €65 billion
Number of Companies – 720
Capital Spending – €2.1 billion
R&D Investment – €4 billion
Direct Employees – 90,000
National Contact – essenscia
European Chemical Industry: An Innovative Solution Provider for Sustainability:
European chemical industry is playing a vital role in the transition to a sustainable society, embracing its importance in this sector as well with other competitive business landscape. The EU chemical industry is working on sustainability issues, building on the Responsible Care Programme and other sustainability initiatives from a long period of time; actually, it has a long history of acting on this. Many Cefic members already have integrated sustainability into their business strategies and in reviewing their services, business models, partnerships and products.
The chemical industry is continuously improving and evolving innovations and creating advanced products solutions that significantly accelerate this transition to a resource efficient, low-carbon and circular economy. Cefic, in order to increase sustainability in more and more chemical industry, has increased engagement with EU policymakers and opinion leaders to accelerate collaboration across the entire value chain to take advantage of the full potential of the industry in progressing towards a sustainable future.
Fasttree3D is a fabless semiconductor startup, which is designing image sensors for spatial awareness for industrial and automotive applications. It helps in measuring the distance to fast moving objects in real-time, enabling driving assistance or autonomous navigation. The startup has an extensive portfolio of >15 patents and currently running two European Horizon 2020 projects and one STW research project in the Netherlands. It aims to be a world-recognized enabler of smart automation systems, positively impacting people and their wellbeing.
The startup helps in development, building and distributing high-precision modular machines for vision, automation, and digital printing. Notion Systems focuses on development, manufacturing and selling inkjet printers, laser treatment equipment, machinery for automation and positioning and special purpose machines. Their inkjet printers are designed for high precision jetting of technical inks. Their laser-based systems provide solutions for ablation, structuring, drilling and cutting. For automation tasks, they provide high precision custom-made solutions. This also includes positioning systems with integrated image processing and alignment.
It is a high-tech start-up which was founded in 2014 in Cologne. SUMTEQ target is to produce and to market SUMFOAM, an innovative nanoporous high-tech insulation material. The startup aims to produce highly efficient insulation materials based on polymer nanofoams. SUMFOAM, one of its products, is the first high-performance insulation material based on polymer foams with the advantages of being scalable and cost-effective. In addition, SUMFOAM is characterized by an extremely high mechanical stability at a relatively low density and so it can be easily formed, shaped without producing dust and is also extremely hydrophobic. As the foaming process is exclusively performed with climate-friendly CO2 and the product can be recycled 100%, a huge ecological benefit can be achieved.
Drawbacks of the European Chemical Industry:
In 2017, the world’s chemical industry turnover was valued at €3,475 billion. Global sales of the chemical grew up by 4.6% to €3,475 billion in 2017 from €3,323 billion in 2016. In 2017, the EU chemical industry ranks second with 15.6%, along with the US (13.4%), in total sales. Whereas, with 37.2% of global chemical sales China is still the largest chemical producer in the world with €1,293 billion in 2017. Over the last ten years, the worldwide competition has changed significantly; China holds the top rank in sales once which is firmly held by Europe.
High energy prices, high labour costs, regulatory and tax burdens and currency appreciation are some of the factors of the loss in competitiveness among other factors, according to a study of EU chemical industry competitiveness commissioned by Cefic from Oxford Economics (2014). R&D intensity, energy prices and exchange rates are the factors that shaped competitiveness according to findings of Oxford Economics. The world’s chemical sales are expected to reach €6.3 trillion by 2030 but the European chemical industry is expected to fall into the third place behind China and the US. Below are some points that are affecting the European Chemical Industry:
European Competitiveness is Highly Impacted by High Energy Costs:
The chemical industry competes globally and is energy- intensive too. In Europe, anything that increases energy costs has a major impact on competitiveness relative to competitors. In 2013, making ethylene was three times more expensive in Europe than in the Middle East and the US, which a profit booster was for abroad and attracting billions of dollars in investment and also falling oil prices have reduced EU costs.
Regulatory Costs Hindering EU Chemicals:
EU legislation levied many additional costs to the chemical industry, impeding international competitiveness. 87% of total regulatory costs comprise of worker safety (24%), chemicals (30%) and industrial emissions (33%) are the main drivers of regulatory cost. The regulatory costs are 16.7% of value added, for soaps and detergents 11.4%, for organic basic chemicals 11.3% and for inorganic basic chemicals 12.1%, which is 16.7% of regulatory costs. In plastics, costs ranged from 23.2% of value added in agrochemicals to 2.7%.
Increased Costs by EU:
In the last decade, EU regulatory doubled the cost of the chemical industry. During 2004-2014 compliance costs increased with the introduction of REACH regulations in 2007, CLP in 2008, in 2012 with investment ahead of Seveso III and in 2013 with ETS Phase 3. After 2012, energy legislation is one of the major contributors to the rising costs. European chemical industry required a regulatory framework, which fits best for purpose, consistent, cost-effective and that doesn’t negatively impact its competitiveness in comparison to other regions.
Opportunities in the European Chemical Industry:
In 2016, the EU chemical industry achieved a surplus of €47.3 billion extra-EU net trade, which is historically a big exporter. Around the world, trading chemicals stimulate competition and provides an opportunity to develop new markets through innovation and encourages production efficiency and helps improve the quality of human life. China is the major competitor of the EU; the competition in China’s chemical market demand is intensifying and growing more weakly. Through increased exports or local investments, the European chemical producers are expected to benefit in the medium term, due to their innovative products and technological capabilities, notably in the field consumer chemicals, automotive, electronics, food and nutrition.
Trade agreements could open markets further with key partners such as the US, Japan and Mercosur that would enable the chemical industry in enhancing the efficiency and better exploit of technical strengths. In 2016, the flow of chemicals between the EU and its trading partners was valued at €245.2 billion. The European chemical industry is characterised by high market share in speciality chemicals and pharma ingredients that is expected to grow further in the future. Due to the introduction of Industry 4.0 technologies, innovation and transformation are expected to pick up speed.
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