Plan for stronger EU chemical industry

The European Commission presented an Action Plan for the Chemicals Industry to strengthen the competitiveness and modernisation of the EU chemical sector. The Action Plan addresses key challenges, namely high energy costs, unfair global competition, and weak demand, while promoting investment in innovation and sustainability. The Action Plan is accompanied by a simplification omnibus on chemicals – the sixth that the Commission has presented in this mandate so far, the so called Sixth Omnibus – to further streamline and simplify key EU chemicals legislation, alongside a proposal to strengthen the governance and financial sustainability of the European Chemicals Agency (ECHA). 

The Action Plan proposes four measures. As for resilience and level playing field, the Commission will establish together with Member States and stakeholders a Critical Chemical Alliance to address the risks of capacity closures in the sector. The Alliance will identify critical production sites needing policy support and tackle trade issues like supply chain dependencies and distortions. The Commission will also swiftly apply trade defence measures to ensure fair competition, while expanding chemical import monitoring through the existing Import Surveillance Task Force. The Alliance will align investment priorities, coordinate EU and national projects, including Important Projects of Common European Interest (IPCEIs) and support EU critical production sites to boost innovation and regional growth.

On the subject of affordable energy and decarbonization, the Commission will implement at full speed the Affordable Energy Action Plan to help reduce high energy and feedstock costs. It has introduced clear rules for low-carbon hydrogen and will update state aid to lower electricity costs for more chemical producers by the end of the year. The plan also encourages using clean carbon sources like carbon capture, biomass, and waste, alongside support for renewables. A public consultation on improving chemical recycling has also been launched today. 

Concerning lead markets and innovation, the Action Plan highlights fiscal incentives and tax measures to boost demand for clean chemicals. The upcoming Industry Decarbonisation Accelerator Act will set EU content and sustainability rules to support market growth and clean technology investment. The upcoming Bioeconomy Strategy and Circular Economy Act will boost the EU's resource efficiency, chemicals recycling, and strengthen the market for bio-based and recycled alternatives to fossil-based inputs. The Commission will also launch EU Innovation and Substitution Hubs and mobilise EU funding under Horizon Europe (2025–2027) to accelerate the development of safer, more sustainable chemical substitutes.

Finally, the plan provides for interventions on per- and polyfluoroalkyl substances (PFAS), reaffirming the Commission's commitment to minimise PFAS emissions through a robust, science-based restriction, while ensuring continued use in critical applications under strict conditions where no alternatives are available which will be proposed swiftly after ECHA's opinion. The Commission will also invest in innovation, promote remediation based on the polluter pay principle, and prioritise the development of safer alternatives.

The EU chemical industry is the fourth largest manufacturing sector, with 29 000 companies providing 1.2 million direct jobs and supporting 19 million across supply chains. The European chemicals industry action plan builds on the Competitiveness Compass and Clean Industrial Deal, while the simplification package delivers on President Ursula von der Leyen's commitment to simplify EU laws and cut administrative burdens, helping businesses innovate and grow.