EU announces Action Plan to revive chemical industry and boost competitiveness

The European Commission has unveiled a new Action Plan aimed at strengthening the competitiveness and sustainability of the EU chemical industry. This initiative addresses key challenges faced by the sector—including high energy costs, global trade distortions, and weak demand—while promoting innovation, decarbonisation, and investment in cleaner technologies. As part of the strategy, the Commission also introduced a new legislative simplification package and proposed reforms to improve the governance and funding of the European Chemicals Agency (ECHA).

At the heart of the Action Plan is the creation of a Critical Chemical Alliance, which will work with Member States and industry to prevent production closures, secure critical supply chains, and coordinate investment in key projects. The plan also expands trade monitoring and pledges quicker use of trade defence measures to level the playing field for European producers.

To support the industry’s energy transition, the Commission will accelerate the rollout of the Affordable Energy Action Plan, update state aid rules to ease electricity costs for more chemical producers, and promote the use of clean feedstocks such as carbon capture, biomass, and waste. It also launched a consultation to enhance chemical recycling and proposed new incentives to grow demand for sustainable, bio-based, and circular alternatives.

Complementing the Action Plan is a sixth "simplification omnibus" designed to reduce regulatory burdens while maintaining high safety standards. This package streamlines chemical labelling, clarifies cosmetic product rules, and simplifies registration for fertilising products—potentially saving the industry over €360 million annually. Additionally, a new proposal to modernise ECHA will ensure the agency can effectively manage its growing responsibilities across EU chemical, waste, and environmental regulations.

Industry feedback

The Chemical Industry Action Plan marks an important and timely first step towards boosting the competitiveness and resilience of the EU chemical industry, said the European Chemical Industry Council (Cefic).

“It is a serious effort from the European Commission to turn the tide for the ’industry of industries’ in Europe. This crucial signal to global investors and the announced measures go beyond signaling support – they include concrete actions that set a strategic direction for European policymakers to reduce energy costs, ease regulatory complexity, and support the transformation of the sector,” said Cefic in a statement.