The current energy crisis has reached an unsustainable level for the European chemical industry. For the first time ever, the EU imports more chemicals than it exports, both in volume and value, resulting in a trade deficit of € 5.6 bn for the first half of 2022.
This same energy crisis is making a dent in the competitiveness of the chemical industry, which is one of the most energy intensive in Europe, having to compete on the global market with players from regions with more favourable energy prices.
The EU chemical sector supplies virtually all other value chains, including food, healthcare, construction and transport, and any disruptions it undergoes endanger the EU’s aim to be strategically autonomous.
European companies have been hit hard by Russia’s continued curtailment of natural gas flows. The International Energy Agency’s latest quarterly Gas Market Report shows Russian gas supplies to Europe have declined by 50% since the beginning of the year, which has pushed international prices to new highs.
The IEA expects market tightness to continue well into 2023 and could well get worse.
It may take 2-5 years before internationalisation of gas prices will get to the point where Europe is genuinely competitive on energy prices.
Energy costs are six to seven times higher in Europe compared to the US, and this is severely impacting European competitiveness.
It is predicted that the US chemicals industry will likely attract investment from European-based global players, and possibly from Asia as well, thanks to relatively low energy costs and aggressive tax incentives. The European chemicals industry will lose ground, in particular, if there is no political willingness to increase energy supply from European resources.
Why will CM be the next generation on quality?
The Fifth International Conference on Chemicals Management (ICCM5) concluded on 30 September in Bonn, Germany, by adopting “a comprehensive global framework that sets concrete targets and guidelines for key sectors across the entire lifecycle of chemicals”.
In October, the People’s Republic of China celebrates its annual national holiday, known as Golden Week. Similar to Chinese New Year, the entire country is on holiday, resulting in business closures and a potential 14-day halt in production and transportation of manufactured goods.
The European Chemicals Agency (ECHA) has amended the Prior Informed Consent (PIC) Regulation, EU 64/2012, to add 27 pesticides and eight industrial chemicals into Annex I, bringing the total to 295. As a result, EU exporters are now required to notify their intentions to export them from 1 November onwards.
The global custom synthesis and manufacturing market was valued at US$271.33 billion in 2022. The market value is expected to reach US$474.94 billion by 2028.
The ocean freight industry is undergoing a massive transformation, as the technology and supply chain management tools are being improved by the day, impacting ocean freight rates.
In the second half of 2022, China unveiled the details of its data export regulations, providing further explanations to its existing laws and regulations on data.
Endocrine Disrupting Chemicals (also referred to as hormone disruptors or EDCs) are synthetic chemicals that are not produced by the human body and that disrupt the normal functioning of humans and animals.
The shipping industry is now returning to normality and is in a downward spiral. The cost of shipping goods from China has slumped to the lowest level in more than two years as the world economy stumbles, dimming prospects for container carriers that turned in record profits during the pandemic.