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An EU Energy Strategy for energy transformation in the chemical industry

°®ÓÎÏ·Öйú¹Ù·½ÍøÕ¾ supports the Green Deal and Europe’s ambition to become climate-neutral by 2050. The transformation of the chemical industry, Europe’s largest industrial energy consumer, towards climate neutrality is a monumental task that requires large volumes of competitively priced renewable and low-carbon energy. As stated in the , the European Commission needs to prioritise new projects for abundant and affordable low-carbon renewable and nuclear energy. We need a real EU Energy Strategy with concrete actions that enable cross-border electrical power, grid expansion for hydrogen and other renewable & low-carbon molecules, and partnerships with resource-rich countries.

°®ÓÎÏ·Öйú¹Ù·½ÍøÕ¾ remains committed to working with policymakers, industry stakeholders, and other partners to drive these essential changes forward.

Electricity Market Design Reform

A well-integrated, competitively priced electricity market is an important enabler of the chemical industry’s energy transformation. However, energy prices including electricity prices in Europe remain higher than those in other regions. To address Europe’s structurally high energy prices and boost regional competitiveness, a comprehensive strategy is required � one that combines a forward-looking market design with industrial, trade, climate, and environmental policies.

Regarding the European Commission’s proposal to amend the European Electricity Market Design, °®ÓÎÏ·Öйú¹Ù·½ÍøÕ¾ recommends:

°®ÓÎÏ·Öйú¹Ù·½ÍøÕ¾ has also partnered with the to help the chemical sector procure more renewable energy. The RE-Source Platform is a European alliance of clean energy buyers and suppliers, working to facilitate corporate renewable energy sourcing. This platform pools resources and coordinates efforts to improve access to renewable energy at both the EU and national levels.

Renewable Energy Directive

Building on the need for a robust electricity market, the transition to renewable energy is another vital component in the journey towards climate neutrality. °®ÓÎÏ·Öйú¹Ù·½ÍøÕ¾ supports the EU’s ambition to increase the supply of competitively priced renewable energies by 2030, which is crucial for developing a climate-neutral energy system. The chemical industry plays a key role in this transition, not only as a significant energy consumer but also as a provider of essential materials and technologies for various sectors.

In the transition to climate neutrality, the chemical sector will require significant additional capacities of energy and hydrogen infrastructure, renewable electricity access, and the commercialisation of new processes at competitive energy prices.

Gas and Hydrogen

Hydrogen and natural gas are critical to the chemical industry, serving as both energy sources and raw materials, they provide the building blocks for a myriad of value chains. The chemical industry, being a major hydrogen producer and consumer, stands at the forefront of the clean hydrogen economy. Yet, the high cost of renewable and low-carbon hydrogen production remains a significant barrier to its uptake.

°®ÓÎÏ·Öйú¹Ù·½ÍøÕ¾ supports the EU’s efforts to develop a competitive hydrogen market and a renewable and low-carbon gas market. Our recommendations concerning the EU Gas Package focus on maintaining gas and hydrogen quality and establishing predictable certification for low-carbon hydrogen.

Nuclear Energy

As the chemical industry continues to explore diverse sources of low-carbon energy, nuclear energy, particularly through the deployment of Small Modular Reactors (SMRs), presents a promising solution. SMRs are compact and modular assets which can be set up on, or in close proximity to, industrial sites to generate continuous low-carbon electricity and heat. 

SMRs hold particular promise for energy-intensive industries, like the chemical industry, which increasingly and heavily depend on accessing abundant and cost-competitive supplies of low-carbon energy. 

In May 2024, °®ÓÎÏ·Öйú¹Ù·½ÍøÕ¾ was appointed Chair of the European Commission’s Technical Working Group on Industrial Applications as part of the EU Commission’sâ€�. On this occasion, °®ÓÎÏ·Öйú¹Ù·½ÍøÕ¾ published two study papers, one looking at the potential of SMRs deployment in the EU chemical industry, and the other outlining the critical enabling conditions for SMRs and issuing related policy recommendations. 

Energy Taxation Directive

Addressing the taxation framework that supports the energy transition is crucial for its success.

°®ÓÎÏ·Öйú¹Ù·½Íøվ’s recommendations on the Energy Taxation Directive (ETD) include improving the complementarity between energy taxation and carbon pricing, safeguarding industrial competitiveness through flexible tax rates, and promoting hydrogen use through an enabling taxation framework. These measures are essential for ensuring that the ETD supports the EU’s climate goals without undermining the competitiveness of European industries.

Energy Efficiency Directive

As an energy-intensive industry, the chemical sector has played a pioneering role in enhancing energy efficiency. Enhancing energy efficiency in the chemical sector is not only a key economic success factor but also a pivotal tool for reducing greenhouse gas emissions. This, in turn, supports the transition towards climate neutrality.

The chemical industry is and will remain a solution provider, leading to energy efficiency further in the value chain such as in the construction industry, automotive, aerospace, homecare products and textiles. Our smart solutions for energy-efficient buildings include products such as chemical-based insulation products, which significantly reduce the energy needed to heat or cool residential and service buildings.