René van Sloten Executive Director Industrial Policy Cefic Perspectives of the European Chemical Industry EESC / EPC Conference, 12 November 2014, Brussels

The European chemical industry in Source: Eurostat and Cefic Chemdata International 2014 Sales 2013: € 527 billion  Contributes to 17% of the world’s chemical sales (2013)  Represents 29,000 companies (96% SMEs)  Employs 1.2 million people (2013)  Generates € 527 billion of revenues (2013)  Creates a trade surplus of €48.7 billion (2013)

Has the EU chemical sector gained or lost competitiveness over the last 10 years? Source: Cefic Chemdata International 2014 Production platform Europe: global production share and trade balance evolution ( )

One quarter of EU chemicals production is sold outside the EU EU home market (€ 388 bn) EU export market € 139 bn 74% 26% EU chemicals production in value (€ 527 billion, 2013) Source: Cefic Chemdata International 2014 = +

Chemicals made in Europe are losing share in the domestic EU market Source: Cefic Chemdata International 2014

Chemicals made in Europe are losing share in the Rest-of-World market Source: Cefic Chemdata International 2014

Advantaged energy and feedstock prices are a clear enabler of competitiveness This is boosting profits abroad and attracting billions of dollars in investment

Can we remain competitive? Large integrated domestic market with strong customer industry clusters High international orientation and global networks to external customer industries Skilled and motivated workers and scientists Constant adaptation to globalised markets Strong innovation efforts will generate new growth clusters: Efficient Energy use, health and new materials which could solve upcoming societal mega challenges  High energy and feedstock costs  High Regulatory Compliance Costs (e.g. REACH, IED,….  Lack of a “Common Industrial Policy” or a “Common Energy Policy”  Non-energy raw material availability and cost issues (eg. biobased feedstock, rare earths, minerals)  Mature market, ageing population, risk aversion of societies

9 billion people will live on Earth by 2050!  How can we guarantee food and water supply for everyone?  What are possible impacts from plant science? Health & Nutrition Sustainability challenges are business opportunities 67% of the world population will live in cities by 2025!  What does future architecture look like?  Which materials are needed to make energy consumption more efficient? Construction & Housing 50% more primary energy needed by 2030!  What is the ideal energy mix for the future?  How big is the share of renewable energy? Energy & Resources 1.2 billion cars will drive on Earth by 2020!  How can we reduce greenhouse gas emissions and fuel consumption?  What will future cars be made of? Mobility & Communication Mobility & Communication Source: BASF

Lead development of integrated water strategies for the chemical sector to: -reduce use of fresh water -improve waste water management New concepts and materials for energy generation, storage and efficiency in sustainable construction and urban mobility New materials for smart living New technologies for more efficient extraction Efficient use and recycling in the chemical industry European Innovation Partnerships

CO 2 - a renewable raw material Polymers Basic chemicals Light olefins Energy carriers Fuels Fine chemicals CO 2 Use as feedstock the only carbon resource we have in abundance in Europe Do what plants do…better

Societal acceptance of new technologies Green biotechnology NanotechnologyRenewable energy Unconventional fossil energy

How can European Industrial Policy help?  Main Goal: 20% Industry participation in European GDP  Mainstreaming Industrial Competitiveness  Resources for Innovation o Horizon 2020 Funds for Priority Action Lines (Key Enabling Technologies, Bio-based Products, Advanced Manufacturing) o Facilitate Integration of Manufacturing and Services o Structural and Investment Funds available for Regions, guided by Smart Specialisation  Better Reguation o Cumulative cost assessment/ Regulatory fitness check for the chemical industry

How can European Industrial Policy help?  Access to Raw Materials o Acknowledges chemical industry’s need to access bioethanol and and other bio-based building blocks at global market prices  Maximise potential of EU's internal market o Call for further development of infrastructure for gas, electricity and chemical building blocks  Facilitate access to external markets: o Stresses the need to facilitate the integration of EU firms in global value chains  Access to Finance

“ The best of chemistry is yet to come “ Let’s make sure it happens in Europe!