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An enabling framework for an efficient and effective transformation

°®ÓÎÏ·Öйú¹Ù·½ÍøÕ¾ supports the Green Deal and Europe’s ambition to become climate-neutral by 2050. The Green Deal recognises that energy-intensive industries, such as chemicals, are essential to Europe’s transition, providing solutions across multiple value chains. Achieving climate neutrality by 2050 entails a significant transformation in the chemical sector within just one or two investment cycles. To make this possible, °®ÓÎÏ·Öйú¹Ù·½ÍøÕ¾ calls for an enabling framework to support the industry’s efficient and effective transformation.

EU 2040 climate target

The European Commission issued its recommendation for an ambitious 2040 climate target for the EU: a 90% reduction in net GHG emissions from 1990 levels.
To meet the EU climate targets, immediate investments are crucial, especially as the industry faces a severe economic downturn and shifting investment opportunities. Europe needs to enhance its economic attractiveness with a clear and competitive policy framework to deliver a successful transformation.

The chemical industry works with and supports policy makers to identify the means of a successful transition to a climate-neutral future.

Industrial carbon management

In light of the EU’s 2040 climate target, °®ÓÎÏ·Öйú¹Ù·½ÍøÕ¾ emphasises the need for a robust industrial carbon management strategy, given the industry’s reliance on carbon. This strategy is crucial for aligning Europe’s climate and circularity goals and addressing current bottlenecks.
Technological advancements alone are insufficient for achieving climate neutrality; a well-structured approach supported by a clear legislation and accounting framework is necessary. A robust carbon accounting framework must avoid double counting and clarify emissions accounting and allowances.

To support effective carbon management and maintain industrial competitiveness, key measures include:

• Advancing carbon capture technologies: Supporting Carbon Capture and Utilisation (CCU) and Carbon Capture and Storage (CCS) with appropriate incentives and infrastructure is essential.
• Integrating carbon removals into policy: Including innovative carbon removals in EU policies will help manage emissions more effectively and cost-efficiently.
• Boosting funding for innovation: Enhanced support for R&D and operational costs is vital to maintaining competitiveness and driving progress.

Sustainable carbon cycles

°®ÓÎÏ·Öйú¹Ù·½ÍøÕ¾ supports the European Commission’s initiative on restoring sustainable carbon cycles, as a crucial step towards effective carbon management. While the chemical industry strives to reduce its carbon footprint through enhanced resource efficiency, circularity, and low-carbon energy, carbon remains central to many chemical processes and products. Thus, access to alternative carbon sources, including waste, biomass and captured CO₂ is essential.

°®ÓÎÏ·Öйú¹Ù·½ÍøÕ¾ also views the European Commission’s initiative to establish a regulatory framework for carbon removal certification as a step toward acknowledging the role of technological solutions in achieving the EU’s climate neutrality goal. The role of carbon removals is expected to become significant by 2050 to compensate hard-to-abate emissions.

°®ÓÎÏ·Öйú¹Ù·½ÍøÕ¾ emphasises that achieving sustainable carbon cycles will require a balanced approach, prioritising emission reduction while fostering innovation in low-carbon technologies.

EU Carbon Market, ETS and CBAM

The European chemical sector, as an energy-intensive industry, faces the challenge of matching competitiveness with the need to reduce emissions. The EU Emissions Trading System (ETS) provides a market-based solution to drive emission reductions cost-effectively, rewarding innovation while maintaining fair competition within the global market.

°®ÓÎÏ·Öйú¹Ù·½ÍøÕ¾ supports the ETS as a key instrument for reducing emissions efficiently across Europe. To remain competitive on a global scale, the chemical industry also requires robust carbon leakage provisions. These include allocating free emission allowances to the best-performing installations and compensating for carbon-related electricity costs. Without these measures, the rising costs of carbon could risk reducing EU investments, undermining the long-term sustainability of the sector.