EU Critical Chemicals Act Proposed to Safeguard European Industry Lead

EU Chemicals Industry Faces Crisis

The joint statement from Czech Republic, Hungary, Italy, Netherlands, Romania, Slovakia, Spain, and France warns that without action, 20 steam crackers could shut down by 2035, costing 50,000 jobs. High energy costs, raw material price gaps, and unfair international competition have left European chemical plants vulnerable.

The European Commission’s upcoming “Clean Industrial Deal” and “Chemical Industry Package” are expected to introduce new support mechanisms, but industry leaders argue they do not go far enough. Instead, they are pushing for a dedicated Critical Chemicals Act, mirroring the Critical Raw Materials Act, to maintain Europe's industrial resilience and supply security.

Strategic Chemicals at Risk

The proposed legislation would protect 15 key chemicals essential to multiple industries, including:

• Ethylene, propylene, and butadiene – Used in plastics, automotive, and construction.
• Ammonia and methanol – Critical for fertiliser production and energy applications.
• Chlorine and sodium hydroxide – Needed for water treatment, hygiene, and pharmaceuticals.
• Sulfur, silicon, and sodium carbonate – Key for battery production, electronics, and agriculture.

According to the statement, import reliance has skyrocketed, with some materials—like sodium carbonates and butadiene—seeing a 70–100% price gap compared to non-EU producers. Without state support, Europe's competitiveness could further decline, leading to increased reliance on non-EU imports.

Implications for Manufacturers

If the EU Critical Chemicals Act is implemented, chemical manufacturers may gain access to funding for decarbonisation, modernisation grants, and trade protections. However, businesses that rely on imported chemicals may face higher regulatory costs or supply chain adjustments.

Additionally, manufacturers in automotive, construction, healthcare, and agriculture must prepare for potential supply shifts if certain chemicals receive priority production incentives within the EU. Companies should assess their exposure to chemical supply risks and explore alternative sourcing strategies to stay competitive.

Call to Action for Industry Leaders

Chemical producers and downstream industries should engage with policymakers to ensure their needs are considered in upcoming EU industrial policies. Businesses can also explore sustainability grants and supply chain diversification strategies to mitigate potential disruptions.