Keynote speech by Vivianne Heijnen, Minister for the Environment, at the lunch event ‘A Call for a European Sustainable Carbon Policy Package’

Speech | 16-04-2024

Distinguished colleagues and guests, good afternoon. And a special welcome to European Commissioner Mr. Hoekstra

First of all, I would like to thank you all for attending this event.

It’s no coincidence that today, during the World Circular Economy Forum in Brussels, we would like to place a spotlight on sustainable carbon feedstocks in the chemical industry.

Because we all know that we need to take swift action at EU level to transform the chemical industry into a sustainable sector.
I say ‘we’ because I’m not just here to represent the Netherlands.

Together with France, the Czech Republic and Ireland we’ve worked on a joint statement on this important issue.
Later on in this session we will officially hand it over to the European Commission, represented here by Commissioner Hoekstra.

In our statement we propose that an overarching European policy framework is needed in order to achieve the transition from fossil to sustainable carbon feedstocks in the chemical sector.

Such a framework is essential if we’re to ensure the long-term competitiveness of the European chemical industry, while at the same time transforming it into a truly sustainable industry.  

But why is it so important to ensure that the EU chemical sector doesn’t get left behind in the quest for a fully sustainable economy?
And how can it play a pivotal role in achieving our goals as leaders and innovators?

I’d like to start by highlighting the challenges we’re facing today: the climate crisis, resource depletion, pollution and an increasingly unstable geopolitical world.

The chemical industry has a key role in all these challenges, as a contributor as well as a solution provider.

The chemical industry can be a driving force in achieving both the EU’s circularity goals and its climate goals, while at the same time reducing our dependency on foreign actors.

The chemical industry is a vital upstream provider of commodities and intermediates for many strategic products, from pharmaceuticals to batteries.
Ensuring the resilience of the value chain – from upstream commodities to end-user products – is vital in limiting external dependencies and achieving Europe’s green ambitions.

The chemical industry already has the knowledge and innovative capacity to process waste and renewable materials into the commodities and intermediates we need, both now and in the future.

At the same time, the sector can promote circularity and reduce its environmental footprint.
As such, the chemical industry is a vital player in reducing unsustainable and undesirable dependencies and building circular practices to create future-proof earning capacity for the EU.

But the chemical industry is facing a number of challenges.
High energy and feedstock prices have made the European chemical sector less competitive in the global market.
Leading to the relocation of activities to countries outside the EU.
If this trend continues, the chemical value chains will be affected, with ripple effects across the EU’s entire economy.
We may even have to start importing chemical products.
Products that do not meet the same environmental and safety standards as EU products.
This could deal a serious blow to our progress towards the EU’s environmental goals.
Ensuring a global level playing field is key to creating a market advantage for safe and sustainable chemicals.
Finally, as the third-largest carbon emitter in the EU, the chemical industry faces a significant challenge when it comes to achieving climate neutrality.
After all, a large proportion of the industry’s input is consumed as feedstock, fuel used as a raw material rather than as a source of energy.

This means that the chemical industry needs to look not only at reducing emissions from its own processes, but also at using alternative feedstock sources.

Currently, the EU uses around 10 per cent of its total fossil resource consumption as feedstock for the chemical industry.
That’s a significant chunk for just one sector, and taking targeted action here can have a huge impact on our total fossil use.
Add to this the need to stop the relocation of chemical activities to countries outside the EU, and it’s clear that we need to act now to promote a green transition in the chemical sector.

What we need in particular is a transition away from fossil resources to sustainable resources.
If the chemical industry is to become a sustainable and competitive leader, sustainable carbon – like recycled materials, sustainable biomass and CO2 – must replace fossil-based carbon.
So we’d like to emphasise the need to effectively promote the uptake of sustainable carbon sources in the chemical industry.

But how do we make the transition to a competitive, circular and climate-neutral chemical industry?
We, the initiators of this joint statement, are convinced that we need an overarching European policy framework.
An EU policy package that focuses on market creation, sustainable carbon availability and instruments to strengthen the competitiveness of the chemical industry.

First of all, market creation is essential to boost demand for and supply of sustainable carbon products.
Effective incentives that take into account all three sustainable carbon sources – recycled materials, sustainable biomass and CO2 – can drive this market.

For instance, achievable, gradually increasing and ambitious targets can be set to promote the use of sustainable carbon as a feedstock in the chemical industry.

This will give the sector clarity and perspective on what we, the EU, expect of it in the future.
Product regulation, like the Ecodesign for Sustainable Products Regulation, is a key factor in creating market pull for sustainable carbon-based products.

This rewards companies and encourages them to adapt their value chain and produce their products more sustainably.
In doing so, the EU is enabling a strong and sustainable chemical sector to flourish in Europe.
At the same time, we need to support innovation to drive the development of the technologies needed for the transition.
Scaling up technologies is vital for market creation.
Programmes like Horizon Europe and the Innovation Fund can play a pivotal role in providing the necessary funding for innovation.

Besides market creation, careful attention needs to be paid to the availability of sustainable carbon to help companies transition to these sources.
To maximise availability, the member states are calling for a sustainable carbon availability strategy, in line with the Waste Framework Directive and the EU bioeconomy strategy.

Sustainable carbon is likely to be scarcer and more expensive than fossil carbon sources for some time to come.
So it’s vital that we develop a strategy to optimise the production and use of sustainable carbon in the EU.
Promoting the higher circular strategies of reduce and reuse and the efficient use of sustainable carbon should be an integral part of this strategy.

Finally, we cannot make this transition without securing the global competitiveness of the European chemical companies making the shift from fossil to sustainable carbon feedstocks.

Product regulation and support for innovation will help create a viable market in the EU and promote a level playing field.
But that alone is not enough.

We’ll need to review state aid frameworks to ensure maximum impact of the policy package on the table.
And we’ll need to fill gaps in financing for startups and scale-ups, as well as leveraging the European single market.

That’s why we’re calling for the use of the entire EU policy toolbox in order to strengthen our global competitiveness.

In concluding, we propose an overarching European policy framework to achieve the transition from fossil to sustainable carbon feedstocks.
Only in this way can we secure a modern, globally competitive chemical industry in Europe.
And one with a low carbon footprint.
Let’s make the most of this opportunity to limit our external dependencies while moving closer to our European climate and environmental goals.

Thank you.