Multiple funding sources needed to de-risk investment in clean technologies
With the ambitious goal of achieving climate neutrality by 2050, the chemical industry is committed to changing how and what we produce in less than 30 years while remaining globally competitive. The chemical industry’s capacity for innovation is instrumental in this transformative journey. Chemical innovation can lead to the development of new products, applications, and even value chains necessary to meet the ambitions of the and maintaining the EU’s industrial leadership.
The estimates that around �620 billion of public and private investments are needed yearly to deliver the European Green Deal and the . The European chemical industry invests more than 15% of its value-added in new and improved manufacturing plants and processes. Annually the industry invests approximately 9 billion euros in research & innovation. In 2023, the amount reached historic levels of 11 billion euros.
Given that the costs necessary to address the substantial changes required for the transition to 2050 can become exceedingly high, companies usually look for multiple sources of funding to de-risk investment. High relevance needs to be given to funding of technology scale-up, taking technological developments efficiently and coherently from the lab to industrial production and, eventually, to consumer market applications.
Public-Private Partnerships
The European Commission has pledged to boost capital investment and finance for advanced materials. For instance, the European Commission targets �500 million for 2025-2027 for a new co-programmed public-private partnership (PPP) “Innovative Advanced Materials for EU�, with at least �250 million expected from private sources.
Already in place, the effectiveness of Public-Private Partnerships in Horizon Europe highlights their importance in driving innovation. (IAM4EU) has been in development for Horizon Europe’s final three years.
°®ÓÎÏ·Öйú¹Ù·½ÍøÕ¾ appreciates these initiatives, yet the amounts provided fall short of what is necessary to significantly speed up the development of advanced materials for the green and digital transition. Also, funding sources, as a general rule, should be easier and quicker to access than is the case today.
For information on public funding, °®ÓÎÏ·Öйú¹Ù·½ÍøÕ¾ members can use the , a member-exclusive tool tailored for the chemical industry, providing an overview of major European grants.
Given that the costs necessary to address the substantial changes required for the transition to 2050 can become exceedingly high, companies usually look for multiple sources of funding to de-risk investment. High relevance needs to be given to funding of technology scale-up, taking technological developments efficiently and coherently from the lab to industrial production and, eventually, to consumer market applications.
Sustainable finance for sustainable investment streams
Following the publication of the 2018 and the adoption of the 2019 , the European Commission implemented several policy instruments aimed at re-orienting investments towards sustainable technologies and businesses and consolidating the role of the financial system as driver of the transition towards a sustainable economy, while also promoting sustainable corporate transparency and governance practices.
The chemical industry is essential to the European and global economy and the EU Sustainable Finance Agenda is an important policy area for °®ÓÎÏ·Öйú¹Ù·½ÍøÕ¾ membership. °®ÓÎÏ·Öйú¹Ù·½ÍøÕ¾ members actively work towards the implementation of the EU Sustainable Finance framework.
“The private sector will be key to financing the green transition. Long-term signals are needed to direct financial and capital flows to green investment and to avoid stranded assets�
2019 EU Green Deal (section 2.2.1)
This ambition has materialised with initiatives such as the EU Taxonomy, the Corporate Sustainability Reporting Directive (CSRD), the Sustainable Finance Disclosure Regulation (SFDR), or the Corporate Sustainability Due Diligence Directive (CSDDD).
1. EU Taxonomy regulation
°®ÓÎÏ·Öйú¹Ù·½ÍøÕ¾ supports the European Green Deal and Europe’s ambition to become climate neutral by 2050. Following the  and theâ€�, the transition towards a society that is climate neutral, circular and sustainable will require new technologies. This also means investment streams and innovation potential play a pivotal role.
Creating a common framework and language (EU Taxonomy) enables informed decision-making to foster investment towards activities and technologies that are environmentally sustainable, and we support European Commission’s efforts to bring clarity and transparency on environmental sustainability to investors, companies and issuers.
However, the chemical sector does not stand in isolation: it is integrated in complex and interconnected value chains, which can be impacted by the transformation occurring in our sector. Moreover, the chemical industry is a capital-intensive sector requiring a long lead-time and heavily dependent on a level-playing field with the right economic incentives.
Companies will need adequate flexibility to incorporate the EU Taxonomy into business models. The EU Taxonomy must be fair and incentivize companies to contribute to the transition journey, while avoiding penalizing those that have not yet reached the finishing line.
°®ÓÎÏ·Öйú¹Ù·½ÍøÕ¾ notes that implementing the EU Taxonomy is not a linear process and will require a supportive and well-designed regulatory framework that minimizes uncertainty, ensures comparability and safeguards competitiveness.
Download the °®ÓÎÏ·Öйú¹Ù·½ÍøÕ¾ views on the EU taxonomy and transition financing
2. Corporate Sustainability Reporting Directive
The Corporate Sustainability Reporting Directive (CSRD) was adopted in 2022 and started applying to largest companies in 2024 with first reports expected in 2025.
°®ÓÎÏ·Öйú¹Ù·½ÍøÕ¾ understands the need for companies to share reliable, comparable and relevant information on their exposure to sustainability risks and impacts so financial market participants can better inform their decision-making.
°®ÓÎÏ·Öйú¹Ù·½ÍøÕ¾ asks that sustainability reporting requirements are:
- meaningful, workable, and proportionate, and reflect the complexities and particularities of companies and sectors.
- Interoperable with other international sustainability reporting frameworks.
Read the the °®ÓÎÏ·Öйú¹Ù·½ÍøÕ¾ views on the European Commission proposal for a Corporate Sustainability Reporting Directive
3. Corporate Sustainability Due Diligence Directive
The Corporate Sustainability Due Diligence Directive (CSDDD) was adopted in 2024 and will start applying to large undertakings in 2027.
°®ÓÎÏ·Öйú¹Ù·½ÍøÕ¾ agrees that robust and clear due diligence requirements for companies are essential to identify and address adverse impacts on environmental and human rights. An adequate and consistent transposition process of the Directive is key to ensure its effective implementation by companies in scope, especially for those operating in complex and extensive value chains.
Download the Joint Business statement on the Corporate Sustainability Due Diligence Directive (CS3D)
Download the Joint Trade Association Statement Towards EU due diligence that works for all