European chemical industry ‘right to be worried’ – Solvay’s CEO says

Petrochemical plant
Source: DollarPhotoClub

European chemical industry is right to be worried about losing competitiveness in the face of high energy prices and high costs of feedstocks – Jean-Pierre Clamadieu, the CEO of Solvay, a global chemistry company founded in Belgium, and President of the European Chemical Industry Council (CEFIC) told Euractiv.

The shale revolution in the U.S. has meant that North American chemical producers have reached competitiveness levels close to those of Saudi Arabia. To prevent European chemicals from losing competitiveness, Mr Clamadieu believes Europe should come up with a single energy policy which focuses on security of supply and competitiveness.

“If you look at the levers,” Mr Clamadieu said, “some of them apply to all industrial sectors. One of them is better regulation – long-term regulation, predictability of regulation, avoidance of duplication. Having a European regulatory framework which is as homogeneous as possible, which means not letting member states making their little adjustments to regulations. This applies to all industries, not just the chemical industry.”

“For the chemical industry specifically, the key issues in terms of competitiveness is access to energy and fixed costs. And there what happened in the last few years has been catastrophic for the chemical industry; the fact that the US has turned almost overnight into a low-cost producer of energy -that has created a significant handicap for us. We think the EU has to react, and cannot stay in such a position for the next decades” – he added.

Mr Clamadieu dismissed suggestions that his views are alarmists, saying that the industry is taking a pro-active approach, foreseeing difficulties ahead. Also, Solvay itself – being a multi-national company, equally exposed to European, American, and Asian markets, is not likely to be affected as much as other European companies, Mr Clamadieu claimed.

“The fact is we got a good vibrant industry today, but the warning signals are becoming stronger,” he explained. “So, we are not alarmist, but saying let’s not allow this situation to drift.”

In Mr Clamadieu’s view there’s no ‘silver bullet’ to solve Europe’s chemical industry’s problems, but the solution would have to involve: making shale gas a part of the EU’s energy policy, improving the transportation infrastructure to stop gas prices differing across Europe, and support to innovation.

“Europe used to have very high quality education systems regarding science, physics, chemistry etc.” he added, “It’s still good, but eroding in terms of quality. it’s very important that we find the graduates that we need to bring into our teams and help us continue to innovate in Europe.”

Support for innovation would also include bringing various corporate-sponsored support systems for R&D together into one fold under European umbrella.

” I think Europe should play strongly its political hand to secure competitive energy supplies.” he concluded.

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