EU chemicals industry on a promising trend
Chemicals output ▲2.1%, Chemicals producer prices ▲5.7%, Chemicals sales ▲7.8%, Domestic sales ▲6.5%, Exports ▲10.8%, Imports ▲5.2%, Consumption▲6.2%.
A decade since the launch of REACH has passed, with the 2018 REACH registration deadline looming on the horizon for Europe’s chemical companies.
▼ Deterioration
▲ Improvement
Production reaches highest level in eight years
Production in the EU chemicals sector grew 2.4% through April 2017 compared to the same period of 2016. Output rose in most chemicals sub-sectors. Production saw a significant increase in plastics (8.0%), dyes and pigments (3.7%), basic inorganics (3.3%), and cosmetics (1.9%). No significant growth for specialty chemicals (0.5%) was recorded. Output reached the highest level for eight years. ▲
Producer prices above previous year’s level for first time in four years
The upward trend of prices accelerated at the beginning of the year and, for the first time in four years, producer prices were above the
previous year’s level. Larger production volumes and the persistent upward trend of producer prices brought a clear rise in sales. The positive development of industrial demand and encouraging construction activities drove chemical business in the EU market. ▲
Domestic sales up by €5.6 billion during first quarter of 2017 (y-o-y)
Domestic sales developed favourably through March 2017. Sales revenue generated by EU companies in the EU single market reached the value of €92.0 billion through March 2017. This represents an additional revenue of €5.6 billion (6.5 per cent, y-o-y). ▲
Exports revenue up by €3.9 billion during first quarter of 2017 (y-o-y)
EU chemicals exports outside the European Union reached the value of €39.7 billion during the first quarter of 2017, generating an additional revenue of €3.9 billion compared to the first quarter of 2016 (10.8 per cent). ▲
Total sales up by €9.5 billion through March 2017 (y-o-y)
Sales revenue (domestic + exports) posted the value of €131.7 billion during the first quarter of 2017, up from €122.2 billion through March 2016 (7.8 per cent, y-o-y). Total sales went up by €9.5 billion through March 2017, with exports outside the EU contributing to 40% of this additional sales revenue. ▲
Imports up by €1.3 billion during first quarter of 2017 (y-o-y)
EU chemicals imports from the non-EU area were valued at €27.4 billion during the first quarter of 2017, up from €26.1 billion registered one year ago (5.2 per cent, y-o-y). ▲
Consumption up by €7.0 billion through March 2017 (y-o-y)
Chemicals consumption in the EU home market developed positively through March 2017. Consumption went up significantly, generating an additional value of €7.0 billion (6.2 per cent, y-o-y). ▲
Trade surplus up by €2.5 billion through March 2017 (y-o-y)
The trade surplus generated by the EU chemicals sector outside the European Union reached the value of €12.3 billion during the first quarter of 2017, up from €9.7 billion recorded during the same period of 2016. The trade performance of the EU chemicals sector (in value) improved, with export growth far outstripping import growth through March 2017. ▲
Cefic looks forward to next 20 years of REACH
A decade since the launch of REACH, and with the 2018 REACH registration deadline looming on the horizon for Europe’s chemical companies, Cefic gathered representatives from industry, authorities and the political sphere to discuss how Europe’s legislative framework for chemical management can be strengthened over the coming decades. Also on the table was the future of REACH in a post-Brexit world.
The main topic concerned the future of REACH. “Industry’s main priority is – now that we have the benefit of ten years’ experience, to enhance our focus on quality improvement to make sure REACH has a bright future”, said Erwin Annys, Cefic REACH Director, during his presentation. “Prior to the advent of REACH, authorities evaluated 141 substances in 15 years, he said. Since REACH, this has increased to 30,000 substances registered over the last 10 years – a testimony to the joint work of industry and authorities. This is a step-by-step approach that takes continuous improvement and we look forward to the next decades of cooperation with authorities.”
REACH and substitution
REACH is innately complex, and the knowledge about the safe use of chemical substances is constantly evolving. For chemical manufacturers, innovating involves looking at the essence of your product portfolio and trying to predict what the future will hold so that laws don’t lead to wasted investment in these new products which could be unexpectedly prohibited in certain applications.
REACH in a post-Brexit world
According to Silvia Segna, representative of the UK Chemicals Industry Association (CIA), the UK will have a major task ahead if a decision will be taken to transpose REACH into UK law, as Brexit negotiations unfold. “Copy paste is not possible where REACH is concerned, because some laws just cannot be directly copied in UK law. Some changes will certainly have to be proposed by the UK government, using secondary legislation”, she said.
A recent public enquiry into REACH by the House of Commons in the UK sought to examine this, and further work will need to be done to ensure that chemicals imported into Europe meet Europe’s high standards for health and environmental safety. Meanwhile, CIA advocate for the UK to pay if necessary in order to still maintain their participation in REACH. The ultimate priority is tariff-free access to the EU’s single market, plus regulatory consistency.
