This is the conclusion of the European Chemical Industry Council (Cefic) following a study on the economic impact on industry of the European Chemicals Strategy for Sustainability (CSS). This legislation includes regulations on Classification, Packaging and Labelling (CLP), the application of a Generic Risk Approach (GRA) and the registration and authorisation system for chemicals (REACH).
Although the details of the upcoming regulations are not yet known, according to Cefic it is already clear that they will be substantial. The replacement of less sustainable chemicals is not always technically or economically feasible. It is also unclear how customers will react to the replaced or reformulated products. The most significantly impacted downstream sectors are expected to be adhesives and sealants, paints, washing and cleaning products.
Commissioned by Cefic, an independent agency investigated data from over 100 European chemical companies to assess the impact of the CLP and GRA regulations on the industry. It found that the new regulations will affect thousands of substances, only some of which can be replaced or reformulated.
Industry will face a loss of at least 12% of their portfolio by 2040 due to these two elements alone. The cumulative impact of all other changes proposed by the Strategy will be bigger. The effect that these changes could have on EU chemical exports has not been examined, which could add significantly to the overall impact.
Robust transition path
Cefic argues that the chemical industry and the European Commission will need to work together to create a transition pathway. “To meet the many challenges of the Green Deal over the next two decades, the industry needs a robust transition path and a predictable growth framework for economic investment,” said Martin Brudermueller, president of Cefic. “I therefore invite European policy makers and EU member state governments to join us in turning the CSS into a true growth and innovation strategy.”
Brudermueller stressed that changes in legislation for the chemical industry will also have far-reaching implications for other sectors: “TThe EU chemicals industry is a major supplier of all manufacturing industries and essential and strategic value chains, including pharmaceuticals, electronics, EV batteries, construction materials. The intended policy changes coming with CSS will also create a significant ‘ripple effect’ across many value chains relying on chemicals.”