Opinion of the European Economic and Social Committee – How to consider value chains in policy-making (Danish presidency exploratory opinion)
Date: 2025-07-16
Institutions: European Economic and Social Committee
Subjects: community resilience, competitiveness, digitisation, industrial policy, innovation, policymaking, strategic autonomy, supply chain, sustainable development, value chain




C_202505145EN.000101.fmx.xml












Official Journal of the European Union


EN
C series













C/2025/5145


28.10.2025






Opinion of the European Economic and Social Committee
How to consider value chains in policy-making
(Danish presidency exploratory opinion)
(C/2025/5145)


Rapporteur: 
Andrea MONE

Co-rapporteur: 
Gonçalo LOBO XAVIER






Advisor


Giulio BUCIUNI (to the rapporteur)




Referral


Danish Presidency of the Council of the EU, 7.2.2025




Legal basis


Article 304 of the Treaty on the Functioning of the European Union




Section responsible


Single Market, Production and Consumption




Adopted in section


26.6.2025




Adopted at plenary session


16.7.2025




Plenary session No


598




Outcome of vote
(for/against/abstentions)


162/0/5




1.   Conclusions and recommendations









1.1.


The European Economic and Social Committee (EESC) stresses the need to ensure resilient, competitive and sustainable value chains in a highly uncertain and geopolitically fragmented context, also marked by aggressive economic strategies, as this issue has vital economic and social implications for the European continent and the European Union itself.












1.2.


Thus, it considers it very important to improve and reinforce the participation of European companies in supply chains, including in leading positions, in order to foster a competitive and sustainable production model throughout the chain, with a positive impact on regions, companies and workers.












1.3.


To this end, this EESC opinion puts forward, and analyses in depth, a number of recommendations (listed below) that should be taken into account in the decision-making process, and also gives due consideration to the work done so far by the EU institutions:






(a)


Use the value-chain and supply-chain approaches for analysis and impact assessment in the design and monitoring of European policies and of the relevant decisions at national and subnational level.










(b)


Develop urgent and effective measures to strengthen the European internal market, ensuring strategic autonomy and production capacity. In particular, this means advancing European industrial and competition policies rooted in sustainable competitiveness and innovation. Similarly, on the external front, value chains must be reconfigured in line with a fair and sustainable trade policy that respects European social and environmental standards and multilateral rules.










(c)


Map supply chains, by assessing them on a granular basis, and analysing individual sectors and levels of company involvement, in order to design targeted policies that address sector- specific challenges and development opportunities, including at regional level. In this regard, the opinion provides data and possible tools that could supplement the existing methodologies.










(d)


Encourage the development of integrated industrial ecosystems to support communities and businesses within global value chains. This includes fostering business creation, participation, and leadership within these chains to advance a production model centred on European values and capacity.










(e)


Make greater use of the cohesion funds to ensure that the Member States have the infrastructure needed to avoid the disruption of value chains, in the areas of transport, resilience, citizen information, roads, IT infrastructure, food protection, cybersecurity, energy supply systems, access to reliable information, and data protection.
















1.4.


The EESC also draws attention to the need to properly involve the social partners and civil society organisations, in their respective roles and functions, in protecting and promoting value chains based on their knowledge and experience, which can be used in a very effective way, in particular concerning decisions regarding urgent situations related to the effectiveness and sustainability of the value chains.












1.5.


The EESC draws attention to the need to invest in informing and communicating with citizens about how to react in the event of disaster, in addition to the need to strengthen the European strategy to safeguard the functioning of the internal market in times of crisis and emergency.




2.   Background to the opinion and general comments









2.1.


In an era of increasing geopolitical tensions, economic uncertainty and rapid technological transformation, Europe’s value chains play a crucial role in securing the EU’s competitiveness, security and innovation capacity, and in supporting the social dimension. Today, global value chains account for more than two thirds of world trade, and this has a particularly significant impact on the EU (1).












2.2.


The various crises in recent years have shown that the length of supply chains – once seen as a driver of efficiency and competitiveness – has also become a source of vulnerability, especially due to excessive dependence on certain countries for strategic raw materials. This underscores the urgent need to prioritise not only the efficiency but also the resilience of supply/value chains.












2.3.


This opinion recognises the substantial work already carried out by the Commission across various policy areas related to value chains, including on industrial alliances, the EU’s economic security strategy, the Critical Raw Materials Act, integrated Important Projects of Common European Interest (IPCEIs) and in-depth reviews and monitoring tools. It will be important not to duplicate but to reinforce and scale these efforts, particularly by highlighting areas such as regional implementation capacity, and entrepreneurship dynamics. The European institutions must therefore continue to reinforce the adoption of a value-chain-specific policy approach to strengthen industrial resilience, enhance innovation, ensure quality jobs and guarantee that the European industrial base remains globally competitive, while maintaining a strong European footprint under the principle of the ‘European way of life’.












2.4.


For the EESC, a value-chain-specific policy approach is essential to reinforcing European industry, securing its social dimension and sustaining global and sustainable competitiveness. This approach must be multidimensional and involve all stakeholders, in particular the social partners, at the various stages of the process, in line with the participatory and inclusive approach that is engrained in previous EESC opinions related to the issue (2).












2.5.


Among the various forms of this approach – including with the aim of using value chains as an analytical tool to ensure impact assessment in all EU policies – the EESC stresses the primary importance of:






(a)



mapping the industrial capabilities of Europe’s regions, given that a comprehensive analysis of regional strengths and industrial ecosystems is paramount to tailoring policy interventions, including by identifying the leading firms operating in each value chain in order to pinpoint the key players and understand their role in the value chains for the purposes of targeted policy support;










(b)



designing policies that create value-chain-wide benefits, with due regard to the fact that the policies should support a balanced approach towards a fruitful coexistence between leading firms that can also generate positive spillovers for micro, small and medium-sized enterprises (MSMEs), workers and regions within each value chain, ensuring an inclusive and resilient industrial and economic strategy.
















2.6.


By adopting this approach, the European institutions can strengthen Europe’s industrial base, promote its social dimension, enhance strategic autonomy, and ensure that the EU remains competitive in an increasingly uncertain global environment. A lot of insights can be found in studies into how Europe can adapt its value-chain strategies to the current economic and geopolitical challenges, ensuring long-term resilience and prosperity (referenced in the opinion footnotes).




3.   Specific comments – the key dimensions and needs of global value chains









3.1.


To provide a meaningful contribution, this opinion examines three key dimensions of the issue:






(a)


the importance of Europe’s value chains in a context of growing uncertainty and security challenges;










(b)


the competitiveness challenges facing European producers – particularly MSMEs; and










(c)


the strategic geographical reconfiguration of Europe’s value chains towards countries that uphold social and environmental standards and respect multilateral rules, in line with a fair and sustainable European trade policy. This reconfiguration reflects the principle of friend-shoring.




These dimensions inform a set of policy recommendations aimed at reinforcing European industry and quality jobs, fostering the future growth and sustainable competitiveness of the EU.




3.1.1.   Reinforcing European value chains at a time of geopolitical tensions and security challenges

As global economic and political instability increases, Europe’s value chains must be strengthened to ensure resilience against external shocks, while preserving sustainability. Domestic security concerns, strategic autonomy, and the need for sustained innovation require targeted policies that:








1.



Ensure the goal of integral sustainability within the process of strengthening resilience







(a)


The EESC stresses the need to ensure a system of supply chains that is not only resilient and efficient, but also sustainable in various respects. Europe must remain a leader not only in what it produces, but also in how it produces, with sustainable production models that must be extended throughout the chain. Value chains are often exposed to risks arising from the fragmentation of supply and subcontracting chains, the respect of collective agreements along the chain, and tax shifting. In this regard, the EESC reiterates that respect for social and environmental standards along all value chains remains a fundamental objective of EU policies in all countries, as well as within the EU itself. For these reasons, in addition to reiterating the recommendations of previous relevant EESC opinions (3), it stresses the need to promote collective bargaining and social dialogue at all levels, including in company restructuring processes, as part of sustainable corporate governance. It is also important to ensure that the use of public funds for companies, as well as all public procurement processes, are conditional on compliance with collective agreements, and to guarantee the involvement of the social partners in the assessment of the social impact of industrial change to avoid the emergence of further regional imbalances within the EU;










(b)


Cohesion policy can support participation in global value chains (GVCs) and GVC engagement, enhancing the active participation of the social partners in the whole process.
















2.



Ensure strategic autonomy in key sectors







(a)


The EU should continue – and step up – its in-depth reviews of Europe’s strategic dependencies (4), including with a view to identifying critical value chains that require reshoring or nearshoring efforts to reduce overdependence on external suppliers, particularly in areas such as semiconductors, pharmaceuticals, and renewable energy technologies. The EU should take targeted steps to reduce strategic dependencies stemming from past offshoring processes – not only in production and services, but also in R&D – especially in sectors where such offshoring has undermined Europe’s industrial and innovation capabilities. The goal is not to reverse all offshoring, but to strengthen Europe’s autonomy while preserving global integration where appropriate. The European Commission’s Joint Research Centre (JRC) has emphasised the need to secure supply chains in critical industries and it is important to take this into account; it highlighted vulnerabilities, particularly in the context of critical technologies and raw materials (5). Data from the JRC and Eurostat on EU production and R&D offshoring trends can help quantify exposure and inform policy responses. European institutions and international bodies have also provided other interesting analyses (6). In its previous work, the EESC called for just transition measures with mapping activities and the establishment of dedicated observatory (7).










(b)


It is essential to pursue a policy of strengthening internal market integration through a comprehensive industrial strategy, based, inter alia, on the Commission’s guidance regarding economic security, in line with the recommendations of the recently adopted opinion on industrial policy and the strengthening of the internal market. Practices such as ‘domestic preference’ can help to strengthen internal demand and Europe’s productive capacities in the face of deficiencies that undermine Europe’s strategic autonomy and security. This preference should always be linked to the respect and promotion of European social standards.










(c)


The continuation of actions proposed by the Commission, the Member States and industry to create industrial alliances, Important Projects of Common European Interest (IPCEIs), agricultural cooperatives, and others, which make it possible to respond to challenges by sharing innovation and risks, as well as efforts to make greater use of joint purchases in strategic components, and to increase circularity and efficiency, appear to be strategic.
















3.



Support the technological upgrading of mature value chains







(a)


Many European industries rely on established value chains that need to be modernised, and the importance of digital transformation in ensuring industrial competitiveness and resilience is clear (8).










(b)


Policies should focus on fostering the adoption of digital technologies, automation, and artificial intelligence (AI) within traditional industries to maintain their global relevance, as also stressed by the EU Competitive Compass. It is also crucial to encourage the clustering of companies and industrial ecosystems in which companies can grow and share knowledge.










(c)


The emergence of AI in production processes also has implications for the management of increasingly complex supply chains. Beyond enabling greater automation and integrated product intelligence, AI can play a key role in enhancing the traceability of fragmented and multilayered value chains, as well as in establishing reliable and integrated verification systems for each transaction. To ensure that these tools contribute positively to compliance mapping and oversight, they must be designed to guarantee maximum transparency and uphold a human-centred approach – ensuring the active involvement of all stakeholders, and in particular, the social partners.
















4.



Enhance collaboration with research institutions and universities and promote the reskilling and upskilling of European workers

European universities and R&D centres should play a more active role in developing innovative solutions for supply chain security and industrial modernisation. Increased funding and knowledge transfer mechanisms would support this effort, which should go in parallel with a comprehensive approach to increasing citizens’ skills. In this context, greater investment in R&D is essential, as Europe as a whole is still far from its 3 % target and lags behind other major international players.












5.



Leverage European defence investments for dual-use innovation

Alongside the crucial discussions on the importance of creating a common European defence, the need to adopt a broad concept of security that also takes into account the need for social resilience and economic security and deals with threats to democracy and interference as well as the effects of climate change, extreme natural disasters and global health risks could also represent an opportunity to develop dual-use technologies that would be useful for both defence and civilian applications. As shown by recent studies (9), by promoting collaboration between companies operating in the defence sector, technology providers and industrial value chains, while ensuring the involvement of the social partners, Europe can stimulate innovation and improve security.




3.1.2.   Addressing the competitiveness issues of Europe’s MSMEs

MSMEs remain the backbone of several European industries, providing essential inputs and services to larger firms. However, many MSMEs struggle to compete in an evolving economic landscape shaped by digitalisation and global competition. Policies should focus on:








1.



Upgrading micro and small enterprises through start-up collaboration

European start-ups can provide digital, operational, and technological solutions tailored to the needs of MSMEs. Encouraging partnerships between MSMEs and innovative start-ups can accelerate digital adoption and competitiveness. Studies highlight how start-ups can drive the transformation of traditional industrial clusters into contemporary entrepreneurial ecosystems (10). Therefore, it is necessary to create a European business creation model that can be distinguished from those of other continents by integrating businesses into pre-existing and structured industrial ecosystems that attract their creation and growth.












2.



Developing industrial clusters into entrepreneurial ecosystems

Many industrial clusters and districts in Europe were formed around traditional industries. By integrating new generations of technology-driven firms into these clusters, policy-makers can create modern entrepreneurial ecosystems that support both legacy firms and new ventures.
In this regard, the regional aspect of value chains needs to be taken into account in order to capitalise on the specific features of each value chain.












3.



Facilitating access to funding and innovation support

Targeted financial instruments and support mechanisms should be implemented to help MSMEs invest in digital transformation, advanced manufacturing, and sustainable business practices, as well as for value chain-related entrepreneurship, particularly in sectors where Europe risks falling behind global competitors such as the United States and China.












4.



Establishing mentorship and capacity-building programmes

Large firms should be incentivised to support MSMEs through mentorship, co-development projects, and knowledge-sharing initiatives, ensuring the dissemination of best practices across the value chain.












5.



Promoting the European development model throughout the chain

It is also important not only to increase the capacity of enterprises to integrate into value chains, but also to support their positioning in the leadership of the chains themselves, in order to promote a European development model throughout the chain.




3.1.3.   Rethinking the geographical configuration of European value chains: the role of GVC relocation aligned with a fair and sustainable trade policy

In parallel with a strong focus on reinforcing the European single market – also through reshoring production to Europe – policy-makers should also pursue a strategy of relocating certain value chain activities to third countries that align with a fair and sustainable trade policy. This approach, consistent with the principles of friend-shoring, involves relocating key segments of value chains to countries that share and uphold the EU’s social and environmental standards, as well as multilateral rules.
3.1.4.   Key policy actions should include:









1.



Facilitating the creation of EU-based value chains.
Regionalisation trends are shaping industrial policies as suggested by many studies on GVCs (11). Ensuring that European firms remain globally connected while reinforcing their European presence is critical. This includes incentives for firms to anchor strategic production capabilities in Europe while maintaining international competitiveness.












2.



Strengthening trade and investment partnerships in line with a fair trade policy. European firms should be encouraged to establish production and supply chain partnerships with politically stable countries that respect EU standards and values and multilateral rules, reducing the risk of dependence on different geopolitical players.












3.



Mapping industrial capabilities and value-chain dependencies.
Given the difficulties in accessing granular data on the value chain, including vulnerabilities, positioning at company level and confidential information, the EU should promote concrete tools to support mapping efforts. Existing methodologies developed by the Commission mentioned in section 2 offer useful models which should be strengthened. Additional tools could include dedicated European observatories, secure platforms for data-sharing, dedicated value chain implementation platforms for key strategic ecosystems and AI-based analysis tools. These tools should ensure the participation of all relevant stakeholders, in particular the social partners.












4.



Provide for back-up plans for disaster situations (in addition to ‘safety kits’ for the population), while also continuously investing in infrastructure – i.e. digital and physical structures – to ensure the resilience of the systems that can allow products and services to circulate in safety even in emergency situations, and improve current tools, such as for example those contained in the Internal Market Emergency and Resilience Act (IMERA), following the recommendations of the EESC opinion on that matter (12). In this particular case, the recent ‘energy shutdown’ in Spain and Portugal showed that investment in informing and communicating with citizens about how to react in the event of disaster, is fundamental to avoiding panic, hoarding and disruption in food and non-food value chain systems that can undermine all of society.






Brussels, 16 July 2025.


The President


of the European Economic and Social Committee

Oliver RÖPKE
               





(1)  
            European Parliament study on Global value chains, 2023: https://www.europarl.europa.eu/RegData/etudes/STUD/2023/702582/EXPO_STU(2023)702582_EN.pdf.

(2)  Opinion of the European Economic and Social Committee on ‘For a resilient, sustainable and responsible European Union supply chain of critical raw materials’ (own-initiative opinion) (OJ C, C/2023/857, 8.12.2023, ELI: http://data.europa.eu/eli/C/2023/857/oj).

(3)  Opinion of the European Economic and Social Committee on ‘For a resilient, sustainable and responsible European Union supply chain of critical raw materials’ (own-initiative opinion) (OJ C, C/2023/857, 8.12.2023, ELI: http://data.europa.eu/eli/C/2023/857/oj).

(4)  2021 Updated industrial Strategy and follow-up report on strategic dependencies (SWD(2022) 41 final).

(5)  
            JRC Highlights Report 2024: https://publications.jrc.ec.europa.eu/repository/handle/JRC141578.

(6)  
            Digital security risk management, OECD: https://www.oecd.org/en/topics/sub-issues/digital-security-risk-management.html; International trade in goods, Eurostat: https://ec.europa.eu/eurostat/statistics-explained/index.php?title=International_trade_in_goods.

(7)  Opinion of the European Economic and Social Committee – Towards a just transition legislative proposal and EU policy tools that enable a more social European Green Deal (own-initiative opinion) (OJ C, C/2025/772, 11.2.2025, ELI: http://data.europa.eu/eli/C/2025/772/oj).

(8)  Buciuni, G., & Pisano, G. (2021). Variety of Innovation in Global Value Chains. Journal of World Business, 56(2), 101167.

(9)  Gereffi, G. (2018). Global value chains and development: Redefining the contours of 21st century capitalism. Cambridge University Press.

(10)  Buciuni, G., Canello, J., & Pisano, G. (2022). Reshoring by Small Firms: Dual Sourcing Strategies and Local Subcontracting in Value Chains. Cambridge Journal of Regions, Economy and Society, 15(2), 237–259.

(11)  Gereffi, G. (2018). Global Value Chains and Development: Redefining the Contours of 21st Century Capitalism. Cambridge University Press.

(12)  Opinion of the European Economic and Social Committee on: (a) Proposal for a regulation of the European Parliament and of the Council establishing a Single Market Emergency Instrument and repealing Council Regulation No (EC) 2679/98 (COM(2022) 459 final — 2022/0278 (COD)); (b) Proposal for a regulation of the European Parliament and of the Council amending Regulations (EU) 2016/424, (EU) 2016/425, (EU) 2016/426, (EU) 2019/1009 and (EU) No 305/2011 as regards emergency procedures for the conformity assessment, adoption of common specifications and market surveillance due to a Single Market emergency (COM(2022) 461 final — 2022/0279 (COD)); (c) Proposal for a Directive of the European Parliament and of the Council amending Directives 2000/14/EC, 2006/42/EC, 2010/35/EU, 2013/29/EU, 2014/28/EU, 2014/29/EU, 2014/30/EU, 2014/31/EU, 2014/32/EU, 2014/33/EU, 2014/34/EU, 2014/35/EU, 2014/53/EU and 2014/68/EU as regard emergency procedures for the conformity assessment, adoption of common specifications and market surveillance due to a Single Market emergency (COM(2022) 462 final — 2022/0280 (COD)) (
OJ C 100, 16.3.2023, p. 95).




ANNEX

How to foster a resilient value chain for the EU chemical industry







OPINION
Section for Consultative Commission on Industrial Change
How to foster a resilient value chain for the EU chemical industry
(supplementary opinion)


Rapporteur: 
Veselin MITOV (BG-II)

Co-rapporteur: 
Marco MENSINK (NL-Cat. 1)






Advisors


Mihai IVAŞCU (to the Group II rapporteur)
George KAPANTAIDAKIS (to the Cat. 1 co-rapporteur)




Plenary Assembly decision


D.M.YYYY




Referral


7.2.2025




Legal basis


Article 304 of the Treaty on the Functioning of the European Union




Section responsible


Consultative Commission on Industrial Change




Adopted in section


4.6.2025




Outcome of vote
(for/against/abstentions)


29/0/0




1.   Conclusions and recommendations









1.1.


High energy and regulatory costs, unfair competition and the lack of a level playing field in relation to third-country competitors are severely undermining the EU chemical industry’s competitiveness and resilience, resulting in several plant closures and job losses. The EESC calls on the EU Institutions to take urgent action to safeguard the sector’s role in the EU’s economy and green transition.












1.2.


The EESC recommends the implementation of a comprehensive energy strategy to reduce industrial energy costs through diversified energy sources, upgraded low-carbon infrastructure, flexible State aid and targeted public procurement.












1.3.


The European Commission must reintroduce the organic chemicals sector (NACE 20.14) into ETS compensation schemes and promote long-term energy contracts to ensure affordable energy access and to support the competitiveness of the EU’s energy-intensive industries.












1.4.


Excessive regulatory costs and administrative burdens are weakening the EU chemical industry’s competitiveness and deterring investment across value chains. There is an urgent need for a streamlined, predictable regulatory framework with simplified REACH rules and faster permitting to reduce compliance costs and support innovation, especially for SMEs.












1.5.


The EESC urges the Commission to ensure the effective enforcement of existing EU rules (especially on imports), to introduce an omnibus proposal for non-REACH chemical policy and to accompany all new legislation with competitiveness checks and clear impact assessments in line with clean industrial policy objectives.












1.6.


A dedicated funding framework and a ‘one-stop shop’ to simplify R&I funding for the EU chemical industry should be established, with a focus on prioritising support for scaling up breakthrough technologies such as chemical recycling, hydrogen chemistry and biotechnologies for the green transition.












1.7.


Despite strong R&D performance, the EU struggles to translate lab innovations into industrial applications. The EESC recommends targeted investment in the ‘lab-to-fab’ phase, stronger collaboration across industry and research and support for digital tools – like AI, supercomputing, blockchain and robotics – to boost manufacturing efficiency and supply chain resilience.












1.8.


The Commission and Member States should implement a comprehensive circular carbon strategy, accelerate permitting for chemical recycling and carbon capture and use/storage (CCU/CCS) technologies, and introduce mass balance accounting rules for calculating chemically recycled content in plastics.












1.9.


Effective global trade agreements that ensure clean trade and investment partnerships, enhanced trade defence instruments and faster investigations are needed to ensure a level playing field and the EU’s strategic autonomy. Ex officio procedures should also be used to their full potential.












1.10.


The EU chemical industry’s future relies on a skilled workforce. The EESC therefore calls for strengthened STEM education, vocational training, apprenticeships and revised State aid rules to encourage company-led training that is aligned with the industry’s real needs.












1.11.


The EESC recommends introducing a SURE 2.0 mechanism to support the EU labour force, while ensuring inclusive transitions through active stakeholder involvement, collective bargaining and social dialogue to guarantee job security and maintain the sector’s long-term competitiveness.












1.12.


The EESC urgently calls for a unified industrial strategy (including a dedicated EU Critical Chemicals Act focusing on the resilience of the whole EU chemical industry), the swift implementation of the Clean Industrial Deal, and adjustments to the carbon border adjustment mechanism (CBAM) to address high energy costs, raw material dependencies and regulatory complexity. The complexity of chemical value chains must be fully considered when expanding the CBAM to prevent carbon leakage and to safeguard the entire sector, not just upstream production.












1.13.


Achieving a sustainable and competitive chemical sector requires stronger incentives and clearer regulatory frameworks tailored to the complexity of an industry serving diverse value chains. This includes tax incentives and grants and subsidies, as well as demand-side measures to drive innovation, decarbonisation and circularity, and the efficient implementation of the Net-Zero Industry Act (1) and its secondary legislation.












1.14.


The EESC calls on all Member States – particularly the current and next trio Presidencies of the Council of the EU – to further strengthen the mandate of the Competitiveness Council and to reinforce its role in the EU decision-making process, coordinating closely with other relevant Council configurations (environment, TTE, trade, etc.) in order to make the EU the most competitive and best place in the world to do business.




2.   General comments









2.1.


The EU’s chemical sector is a crucial component of the EU economy, generating an annual turnover of approximately EUR 655 billion and EUR 165 billion in added value as of 2023. It comprises around 31 000 companies (97 % of them SMEs), directly employing 1,2 million people and indirectly supporting 3,6 million jobs. The industry forms a long, dense, complex and interconnected value chain, playing a vital role in national and regional economies through employment and significant economic contributions.












2.2.


Chemicals are fundamental to everyday life and are used across many sectors such as the defence, agriculture, food, manufacturing and construction sectors. They are found in transportation materials, consumer products, appliances, industrial equipment, pharmaceuticals, personal care products and fragrances. Most manufactured goods contain chemicals. Chemicals are also a crucial pillar of the EU’s climate-neutrality goals. They make it possible to develop clean technologies, help reduce greenhouse gas emissions in the construction sector and support sustainable agriculture through the production of green nitrogen fertilisers and the reduction of animal emissions thanks to innovative gut-health solutions.












2.3.


Despite its significant contributions, the EU chemical industry faces multifaceted challenges that threaten its resilience and competitiveness. Higher costs have led to falling exports and rising imports, with both leading to carbon leakage in the EU chemical industry, with some companies relocating production outside the EU or even shutting down activities. Between 2023 and 2024, these plant closures led to a loss of over 11 million tons in production capacity, affecting 21 major industrial sites. Over the past 15 years, the industry has become less competitive and has lost 11 percentage points in global market share since 2008 (2). The capacity utilisation rates of EU chemical plants are currently around 75 %. The situation is further exacerbated by the influx of products from third countries that do not comply with EU environmental standards, creating unfair competition and undermining the EU’s efforts towards sustainability and industrial decarbonisation.












2.4.


The European Commission’s proposal (3) to impose additional tariffs on fertiliser imports from Russia and Belarus is a necessary step towards reducing strategic dependencies and protecting the EU’s production capacity. The EESC strongly supports this initiative and recommends the swift implementation of the proposed measures, while ensuring complementary support for EU farmers and fertiliser producers in order to maintain competitiveness and food security.












2.5.


Mario Draghi’s report on The Future of European Competitiveness (4) highlighted the urgent need to address Europe’s industrial competitiveness, especially for energy-intensive sectors like the chemical sector. On 20 February 2024, 73 business leaders across 17 sectors signed the Antwerp Declaration (5), calling for a European Industrial Deal to complement the Green Deal and keep high-quality jobs for European workers in Europe. Today, over 1 300 organisations from 25 sectors support this initiative. Urgent action is needed to restore the EU’s investment appeal.












2.6.


The EESC welcomes the fact that the EU is now placing competitiveness at the heart of its 2024-2029 strategic agenda, and calls on the Competitiveness Council to lead and coordinate the workstreams with other relevant Council configurations (environment, energy, trade etc.).




3.   Energy









3.1.


Energy cost is one of the most critical factors due to its high share in the total cost structure, directly affecting the competitiveness of the EU chemical industry. Despite recent declines, gas prices remain 4-5 times higher compared to those in the US, while electricity costs are 1,5-2 times higher. This puts the EU at a disadvantage in producing energy-intensive basic chemicals such as ethylene, propylene, ammonia, chlorine and alkalis. Additionally, about 50 % of the sector’s energy input is also used as feedstock, with fuel serving as a raw material input (6).












3.2.


The EESC urges the Commission and Member States to adopt policies that reduce energy prices for industry and to prioritise new projects for electrical interconnections at both national and EU levels, along with investments in grids for hydrogen, other renewable and low-carbon molecules and energy storage.












3.3.


The EESC calls on the Commission to reintroduce the organic chemical segment (NACE 20.14) into the list of eligible sectors for indirect cost compensation for the EU emissions trading system (ETS). This would allow Member States, through national State aid schemes, to support the most electro-intensive sectors that are facing electricity cost increases resulting from the EU ETS. Many downstream sectors and value chains are dependent on these types of upstream organic chemicals.












3.4.


The EESC recommends that the Commission and Member States adopt a comprehensive energy strategy to enhance industrial competitiveness by:






—


diversifying energy sources through increased investment in renewables and nuclear power to reduce reliance on expensive fossil fuels;










—


securing a competitive gas supply by strengthening liquefied natural gas (LNG) infrastructure and fostering strategic trade partnerships to ensure stable and affordable access, while accounting for the complexity and sensitivity of interconnected industrial processes;










—


improving energy efficiency in industrial operations by helping to modernise facilities through advanced energy-saving technologies and waste heat recovery systems;










—


encouraging long-term energy contracts, including power purchase agreements (PPAs) and contracts for difference (CFDs), to provide price stability and predictability for energy-intensive industries; and by










—


introducing targeted public procurement measures and more flexible State aid rules, which are paramount to lowering prices and supporting industrial competitiveness.








4.   Regulatory environment









4.1.


The cost of regulation is another factor affecting the competitiveness of the EU chemical industry. A 2016 cost assessment conducted for the Commission estimated that the annual burden on EU chemical companies between 2004 and 2014 was EU 10 bn. Today, regulatory costs are estimated at 12-13 % of the industry’s total added value (7). Due to the sector’s interconnected value chains, these costs also affect many downstream industries.












4.2.


To incentivise future investment in the chemical value chains, it is essential to reduce administrative burdens. The EESC calls for simplifying and accelerating the permitting procedures for new chemicals and sustainable materials to boost R&D investments.












4.3.


In the context of the Clean Industrial Deal, a chemical industry package, set for adoption in late 2025, will include a targeted revision of the REACH Regulation and initiatives to boost the sector’s competitiveness and modernisation, and support production and innovation in Europe. President von der Leyen will also convene a Strategic Dialogue on the Future of the Chemical Industry in Europe, following the strategic dialogues organised with the automotive and steel sectors.












4.4.


The EESC calls on the Commission to truly simplify REACH (by reducing complexity), enhance its implementation and reduce costs and uncertainty, especially for SMEs. A more predictable regulatory framework is essential for encouraging investment and strengthening the EU’s industrial base and strategic resilience, while also safeguarding both human health and the environment, and continuing the search for substitutes for hazardous products.












4.5.


An omnibus proposal for non-REACH chemical policy issues should also be introduced to implement corrective measures based on clean industrial policy goals. New legislation should be prioritised and accompanied by a comprehensive impact assessment, including a competitiveness check.












4.6.


The EESC asks the Commission and Member States to improve efforts to enforce the existing EU regulations on the environment and the safety of chemicals, focusing on imports of both chemicals and goods, including those sold on online marketplaces.




5.   Research and innovation









5.1.


The EU chemical industry is a leader in innovation, with one of the highest shares of chemical patent applications and grants, on par with the US. Chemical companies invest approximately 6 % of their added value into R&D annually, which is the highest percentage globally. The EU is a leading region in the production of bio-based, biodegradable and recycled plastics. EU chemical companies are at the forefront of developing innovative chemical recycling solutions.












5.2.


The EESC calls on the Commission to ensure that the chemical industry is adequately represented, both in a dedicated fund and in research and innovation funding calls. It also calls for a ‘one-stop shop’ for companies to simplify R&I funding instruments and accelerate the evaluation process, with a particular focus on de-risking and scaling up projects for commercialisation.












5.3.


In support of the chemical industry’s green and digital transformations, the EESC calls on the Commission to provide targeted funding and support for:






—


new chemical processes, hydrogen chemistry and advanced recycling technologies, as well as water reuse and treatment technologies;










—


collaboration between chemical companies, tech startups and research institutions to accelerate innovation and enhance competitiveness;










—


the middle phases of the innovation chain, especially the ‘lab-to-fab’ stages, where the EU lags behind competitors;










—


the adoption of AI, big data and robotics in manufacturing to improve efficiency, reduce downtime and optimise production processes; and for










—


developing logistics and inventory tracking systems to minimise shortages, delays and inefficiencies in the supply chain.








6.   Access to raw materials









6.1.


The EU chemical industry needs access to competitively priced raw materials and alternative feedstocks such as biomass, waste and carbon dioxide. To enhance the EU’s raw materials security, the EESC calls on the Commission and Member States to expand renewable and circular carbon feedstocks by including the development and expedited permitting of advanced chemical recycling technologies, and creating a circular carbon strategy that incentivises CCU, biobased feedstocks and advanced materials.












6.2.


The EESC urgently calls on the Commission to provide clarity on circularity by introducing mass balance accounting rules for calculating chemically recycled content in plastics, in connection with the Single Use Plastics Directive’s implementing act. This clarity will enable investments in recycling technologies, foster new value chains for collecting, sorting and recycling plastic waste, support the EU Green Deal goals and secure the EU’s strategic autonomy.












6.3.


The chemical sector is a prominent export industry for the EU, contributing EUR 35 bn to the manufacturing trade balance in 2023. Although it ranked fourth in 2023, it has historically ranked second and third, after machinery and transport (aircraft and defence) and pharmaceuticals. Polymers and intermediates, as well as downstream components positively impact the trade balance. However, the energy-intensive upstream segment remains a net importer.












6.4.


The EESC asks the Commission to foster a level playing field for the chemical sector via effective global trade agreements and enhanced trade defence instruments by shortening investigation timelines and making use of ex officio procedures. The announced clean trade and investment partnerships should be complementary to free trade agreements.




7.   Skills









7.1.


The EESC recommends ensuring inclusive decision-making processes that involve industry representatives, workers and civil society organisations. This should be accompanied by mechanisms to regularly assess the effectiveness of implemented measures and to adapt policies as needed, ensuring that the sector’s green and digital transitions are equitable and inclusive, with social dialogue and collective bargaining playing key roles.












7.2.


The EESC asks the Commission to identify – in collaboration with industry, trade unions and other stakeholders – gaps between the industry’s current and future skills needs and existing university education programmes. This should lead to the development of new curricula and training programmes, particularly in the digital and IT fields and for R&I, production, logistics, chemical safety and chemical regulation. Apprenticeships should also be promoted to address skills gaps and the sector’s lack of attractiveness. In this context, the EESC recommends a revision of State aid rules to boost incentives for companies to invest in training programmes.












7.3.


The EESC recommends that the Commission prioritise developing a skilled workforce by also strengthening STEM education, vocational training and reskilling programmes to prepare workers for emerging technologies. In addition, the EESC calls for a SURE 2.0 instrument to support workers and those undergoing restructuring in the context of the twin transition.




8.   Strategic autonomy and global competitiveness









8.1.


The EESC urges the EU institutions to support strategic autonomy and preparedness, and to enhance the global competitiveness of the EU chemical industry by developing a cohesive strategy that aligns industrial, energy, water and environmental policies. This strategy must ensure abundant and affordable energy, access to critical raw materials, value chain integrity and support for domestic recycling and circularity. The EESC also recommends adopting a dedicated EU Critical Chemicals Act and creating a respective alliance, focusing on the resilience of the whole EU chemical industry to strengthen production capacity and reduce dependence on imports from third countries.












8.2.


The EU should, as soon as possible, implement the Clean Industrial Deal and support businesses and manufacturing in Europe, while also balancing competitiveness, innovation and resilience. Both SMEs and large companies need regulatory adaptations that maximise impact and help them succeed in the face of global competition. The EU must adopt a more incentive-driven approach that addresses industry constraints (time, capital, people) and supports key technologies like chemical recycling and CCU/CCS. The EESC recommends implementing tax credits, grants and subsidies for chemical industry companies investing in clean technologies, sustainable practices, green chemistry and automation, to support their transition to more sustainable and innovative operations.












8.3.


The EESC asks the Commission to carefully consider the complexity and long value chains of the chemical industry when extending the scope of the CBAM. The chemical industry value chains are intricate and interconnected, encompassing all sectors of the economy. A CBAM that only addresses the upstream segment (base materials) of a value chain, as proposed for the sectors covered by the CBAM Regulation, could be bypassed by importing downstream products, risking carbon leakage and jeopardising not only the EU upstream chemical production, but ultimately also the entire value chain.












8.4.


The EESC calls on the Commission to introduce effective demand-side measures for the chemical industry in order to make the EU business case for decarbonisation and to make circularity projects ‘investable’. These ‘pull’ measures should be adjusted to the complexity of an industry serving diverse value chains, each with its own purchasing drivers.












8.5.


The EESC also asks the Commission to efficiently implement the Net-Zero Industry Act and its secondary legislation. For each sub-category of net-zero technologies, a detailed list of final products, components and key chemical materials should be adequately identified. This would provide the necessary clarity and certainty for EU chemical producers. These products and components rely on complex upstream material flows from manufacturing value chains.






Brussels, 5 June 2025.


The President


of the Consultative Commission on Industrial Change

Pietro Francesco DE LOTTO
               





(1)  Regulation (EU) 2024/1735 of the European Parliament and of the Council of 13 June 2024 on establishing a framework of measures for strengthening Europe’s net-zero technology manufacturing ecosystem and amending Regulation (EU) 2018/1724 (OJ L, 2024/1735, 28.6.2024, ELI: http://data.europa.eu/eli/reg/2024/1735/oj).

(2)  
            The Competitiveness of the European Chemical Industry: https://cefic.org/app/uploads/2025/05/Cefic-Advancy-study-The-Competitiveness-of-the-European-Chemical-Industry.pdf.

(3)  
            https://ec.europa.eu/commission/presscorner/detail/en/ip_25_340.

(4)  
            The Future of European Competitiveness: https://commission.europa.eu/topics/eu-competitiveness/draghi-report_en.

(5)  
            The Antwerp Declaration for a European Industrial Deal: https://antwerp-declaration.eu/.

(6)  
            The Competitiveness of the European Chemical Industry: https://cefic.org/app/uploads/2025/05/Cefic-Advancy-study-The-Competitiveness-of-the-European-Chemical-Industry.pdf.

(7)  
            The Competitiveness of the European Chemical Industry: https://cefic.org/app/uploads/2025/05/Cefic-Advancy-study-The-Competitiveness-of-the-European-Chemical-Industry.pdf.



ELI: http://data.europa.eu/eli/C/2025/5145/oj
ISSN 1977-091X (electronic edition)