Ursula Von Der Leyen
President
European Commission
Brussels
Dear Madam President
I know that you are aware that the chemical industry in Europe is highly stressed currently and is well into a ‘closure phase’. Approaching 200 chemical plants have closed down during the last five years.
It is clearly a ‘critical industry’ for national security purposes. Europe cannot run hospitals, feed people or build weapons without our key products.
Since COVID we have seen a huge increase in both energy costs and carbon taxes but more recently we have been experiencing a further and even more difficult threat.
China is overbuilding its entire chemical industry, which it fully recognises is a critical ingredient for its national security. This intentional excess capacity (which is considerable) is being ‘dumped’ into our European marketplace at unsustainable prices. The result is an accelerating rate of closure of our chemical industry. China does not have superior economics for chemical manufacture so it is very clear that when our industry has shut down, prices will rise rapidly and consumers will suffer. In addition, chemicals made in China have double the carbon footprint.
Europe must be protected from unfair competition, preferably quicker than at ‘snail’s pace’. The Safeguard and/or Industrial Accelerator Act currently under review should be implemented for chemicals, one of Europe’s largest and most important sectors (employing one million people).
My second point refers to Project One in Antwerp, the first major chemical investment (€5 billion) in Europe for a generation. It produces the lowest carbon footprint ethylene in the world, the essential building block of the entire chemical industry. It has one third of the carbon footprint of other European ethylene crackers. It generates huge GVA for Europe.
This is exactly the type of investment project that Europe should welcome and be supporting. Sadly, this has not been the case. Project ONE has not received any EU funding, despite its strategic, economic, and environmental benefits. Shockingly, it was considered ineligible for the EU Innovation Fund.
In March of this year, you announced the ETS Investment Booster, with a budget of €30 billion. For Europe to maintain a viable chemical industry, this new scheme must be defined so that it can support projects such as ours, both in the planning stage, or in the execution phase. Europe needs to start giving the type of support to industry that our global competitors receive from their governments.
Yours sincerely
Sir Jim Ratcliffe
Chairman, INEOS