The plastics and chemical sectors in Europe and North America have a beef with government and regulators. Do they have a point?
On Feb. 8, the American Chemistry Council sent a letter to President Joe Biden complaining about "regulatory overload" on the chemical industry. ACC argues that federal regulations threaten the Biden administration's efforts to grow U.S. manufacturing in key areas like clean energy.
"What we cannot do is fumble this opportunity to make things in this country," ACC President and CEO Chris Jahn said in comments at a Feb. 7 media briefing. "We're going to need to take advantage of our energy dominance, our ability to innovate. We want the administration to be successful in achieving its goals to grow manufacturing going forward."
The complaint isn't new. Six months ago, ACC launched its "Chemistry Creates, America Competes" campaign to push back against a "massive surge" in new regulations aimed at chemicals and plastics. That included the Environmental Protection Agency's plastic pollution strategy and the uncertainty of whether federal agencies are going to back ACC's preferred positions on issues related to chemical recycling.
The Feb. 8 letter also mentions potential restrictions on fluoropolymers and other chemicals.
Meanwhile, the chemical industry in Europe is singing the same song. Leaders there also believe that government policy in the European Union threatens the industry's future, potentially making it uncompetitive with other parts of the world, including the United States.
That's at least in part because they see Europe falling behind the U.S. as a result of the Inflation Reduction Act. So the chemical industry in Europe has been calling for legislation and policy that includes more government investment, and they hold up the U.S. as an example to emulate.
We've been tracking the debate and concern in Europe for a few years now. It's a common theme there that industry leaders feel they're at a disadvantage when it comes to competing with North America. And that's not just because the U.S. has cheap, plentiful natural gas from fracking. It's policy-related, too.
On Feb. 20, leaders from Europe's top chemical companies issued a statement called "The Antwerp Declaration for a European Industrial Deal."
"Basic industries in Europe are grappling with historical challenges: Demand is declining, investments in the continent are stalling, production has dropped significantly and sites are threatened. We want to drive the transformation of our companies. For this, we urgently need decisive action to create the conditions for a stronger business case in Europe," said Martin Brudermüller, president of the European Chemical Industry Council and chairman of BASF SE.
The declaration was presented to European Commission President Ursula von der Leyen and Belgian Prime Minister Alexander De Croo.
Meanwhile, Jim Ratcliffe, chairman and founder of Ineos Group, also wrote a letter to von der Leyen with a call to help Europe's chemical industry. Ratcliffe warned that Europe is "sleepwalking towards offshoring its industry, jobs, investments and emissions." He cited carbon taxes as an example of a popular policy in Europe that makes industry there uncompetitive with the United States.
"Carbon taxes have been successful in driving away investment from Europe," Ratcliffe wrote. "These taxes have encouraged imports from countries without carbon taxes, which has increased the carbon footprint of Europe. In contrast, the U.S.A. have used the carrot not the stick, which provides half a trillion dollars of government incentives for technologies that improve the carbon footprint of the U.S.A. This encourages investment in cleaner technologies.
"There will be little left if the European government does not address the high energy costs, carbon taxes and lack of renewal that impacts the chemicals sector in Europe," he said.
Maybe the grass in the United States is looking greener from the perspective of our European neighbors, but that doesn't mean ACC is happy. Jahn said ACC has met with the White House, EPA and the Department of Defense, and he noted that Congress has held two oversight hearings on the concerns.
"What we're looking for is a group to actually take action, to look at these impacts and actually do something about it," Jahn said.
ACC's letter said regulations on the chemical industry have doubled in the last 20 years, and the regulatory burden is "putting the sector at risk."
These complaints from industry leaders in Europe and North America shouldn't come as a surprise, especially in a presidential election year. It's their job to lobby on behalf of their members. But what's interesting to me is the persistent complaints from Europe that the Inflation Reduction Act is giving the U.S. a competitive advantage. Maybe instead of sending complaints, ACC should also send along a thank-you note.
Don Loepp is editor of Plastics News and author of the Plastics Blog.