Cumulative Cost Assessment of the EU Chemical Industry DG Enterprise and Industry Unit F2 Chemicals Industry Fertilizer Working Group 15 December 2014 Tanja Kranjc, ENTR.F2 / policy officer

Context of the Cumulative Cost Assessment (CCA) "The objective of revitalization of the EU economy calls for the endorsement of the reindustrialisation efforts in line with the Commission's aspiration of raising the contribution of industry to GDP to as much as 20% by 2020." "Studies on cumulative cost assessments have been conducted in a number of sectors (steel, aluminium) and will be performed in others (e.g. chemicals and forest-based industries) in an effort to estimate ex-post the joint costs of different strands of national and EU regulations on industrial sectors." Communication on European Industrial Renaissance, January 2014

Context of the Cumulative Cost Assessment (CCA) "A package of initiatives covering regulatory fitness of the chemical sector will be launched in 2014, including a Cumulative Cost Assessment and a Fitness Check of the most relevant chemicals legislation other than REACH." "…CCAs provide industry-wide assessments of a variety of key cost factors. Given their limited scope and the focus on regulatory costs rather than benefits, CCAs cannot be the sole basis for policy recommendations. Their results will feed into evaluations, Fitness Checks and impact assessments." COM(2014) 368 final, new REFIT communication

Better Regulation agenda - Quality of legislation, timely and correct implementation, proper enforcement; - Chemical companies, many of them SMEs, need stable regulatory environment; - Competitiveness, environmental and health, safety and consumers' objectives; - EU legislation is necessary because it contributes to a level playing field in the internal market; - Manufacture of fertilizers = additional specific regulation.

The objective of the CCA study - To measure cumulative costs for the chemical industry resulting from different EU legislation - To measure their evolution over last ten years, as compared to the profit margins and to international competitors N.B.: No policy recommendations at this stage!

The scope of the CCA study - To analyse CCA effects for the chemical industry as a whole, along the production chain (administrative costs related to access to feedstock, production processes, marketing/commercialisation, and after-sales activities); - To analyze actual cumulative administrative costs, both direct and indirect, of existing legislation.

The matrix approach - Cumulative costs assessment will be based on a matrix covering subsectors of the chemical industry based on NACE categories as well as the different pieces of EU legislation affecting the chemical industry along the production chain. - The matrix approach will enable to demonstrate the costs per subsectors of the chemical industry as well as per most relevant EU legislation.

The matrix approach - illustration Subsectors NACE Access to feedstock Production Placing on the market, sales, marketing Aftersales incl. waste management A B C D E F G H I J K L 20.11 20.12 … 20.15 (Manufacture of fertilizers and nitrogen compounds)

Subsector-specific input to the study - What are the most relevant EU legislation and policies affecting inorganic and organic fertilizers? - Which structures have been established for the purpose of the study? - How to define the relevant cost categories, both direct and indirect, for the most relevant EU legislation and policies? - Sub-sector specific cost structure; - Subsector-specific data; case study? - EU legislation vs. MS implementation; - Related studies on fertilizers…?

Timetable Timeline 23 July 2014 25 July 2014 Signature of the Contract Kick-off Meeting September 2014 1st Steering Group Meeting 1st Mirror Group Meeting October 2014 Inception Report 2nd Steering Group Meeting 2nd Mirror Group Meeting January 2015 1st Intermediate Report 3rd Steering Group Meeting 3rd Mirror Group Meeting April 2015 2nd Intermediate Report 4th Steering Group Meeting 4th Mirror Group Meeting May/June 2015 Validation Workshop July 2015 Final Report

Thank you for your kind attention! Questions and opinions on a follow-up are welcome! Contact: ENTR/F.2 = GROW/I.2 tanja.kranjc@ec.europa.eu liliana.popescu@ec.europa.eu Mirror group: alasdair.reid@technopolis-group.com