The EU needs an ambitious industrial strategy

Marco Mensink is Director General of Cefic

As a leading driver of industrial innovation, Europe has often been at the forefront of the important technological developments that have been instrumental in transforming our world. From the era of geographical discoveries to the invention of the steam engine and automobile, we have a long history of groundbreaking innovation.

The chemical industry represents just one of the many industries in which innovation holds an integral part in the running of day-to-day business. Though some of the industry’s innovation strategies may be hidden from the public eye, the impact of these inventions has far-reaching consequences for society.

Take, for example, recycling. As the need to improve plastic recycling rates grows more urgent by the day, the chemical industry has come up with a solution: a magnetic fluid technology that overcomes the weaknesses of mechanical recycling and, as a result, leads to a higher quality of recycled material. A roof coating that reflects solar radiation and help maintain cool temperatures inside a building without the use of air conditioning stands as another solution, working by generating less electricity consumption and therefore producing more energy efficient buildings.

Industry is a major driver of innovation and a vast majority of technologies and solutions emerge from the industrial research and development facilities or joint ventures between industry and academia, such as, for example, the collaboration between the Technical University of Aachen and Covestro, which resulted in the creation of the CAT Catalytic Center.

The chemical industry commits to facilitating the European Union’s ambitious transition to a low-carbon economy. We are developing materials and technologies to boost the buildings’ energy efficiency, make 100% recyclable products and build more efficient wind turbines, among other things, and this is just a small sample of the game-changing technologies that we are working on.

If we are to continue with the same level of innovation, we need a coherent policy framework – a renewed EU industrial Policy Strategy that would take into account specific challenges the manufacturing industries are facing in adapting to a lower-carbon economy.

Last year, the European Commission took an important step in supporting European industry when it published its Communication entitled ‘Investing in a smart, innovative and sustainable industry – A renewed EU Industrial Policy Strategy’. Supported by some 130 industry associations, this document acknowledges and helps realise the EU policy ambition to make Europe the global leader in high added value, low-carbon and sophisticated products and services.

In spite of the substantial progress that has been made on this front, it is time for the EU to take a step further and supplement this Communication with an ambitious strategy to prevent Europe from falling behind in the competitive global race for innovation and to ensure that it continues to generate qualified jobs, develop innovative technologies and manufacture sustainable products for a more low-carbon and resource-efficient economy.

Although the technologies and solutions may already be in existence, the question remains as to whether they will be produced locally in Europe or somewhere else.

In recognition of the chemical industry’s importance for the establishment of an effective industrial strategy, China, the Middle East and India have all made successful efforts to simultaneously build up large and increasingly sophisticated production facilities and attract high investments by ultimately putting industry at the top of their political agendas. The same applies to the USA, where the recent shift towards ‘America First’ will inevitably hold further influence over their industrial policy.

It is important that a potential EU Industrial strategy reflects the following three principles:

First, predictability in the policy framework, which will translate into greater investment confidence by paving the way for future investment opportunities in the region; second, a focus on the value chain in its entirety, with an analysis of its overall contribution to a low-carbon circular economy instead of an examination of its parts in isolation; and third, an objective, ongoing assessment of cumulative regulatory cost as a means to define the most cost-effective ways of achieving the desired regulatory outcomes, without lowering their level of ambition.

We are asking the European Commission to join the dots and make the EU the most appealing place to invest in so that the industry could deliver technological solutions to help mitigate the impact of climate change, harness renewable sources of energy, curb the amount of waste or solve other major societal problems.

Content supported by Cefic

This article is part of our ‘What the Chiefs Say’ series in which senior executives from businesses and other organisations share their ideas, concerns and expectations about Europe’s policymaking. The content is supported by our partners and networks, and does not necessarily reflect the views of Friends of Europe.