A European Chemicals Industry Action Plan

The Communication of the (non-binding) European Chemicals Industry Action Plan, although a bit delayed, finally got published just before the Summer break.

In response to the crisis faced by the sector, the Chemicals Action plan promises (for the majority already existing or planned) actions on four fronts:

Keeping production in Europe
Securing energy and accelerating decarbonisation
Driving innovation and lead markets
Simplifying regulations

Highlights of this document for EIGA include the establishment of a "Critical Chemicals Alliance" and updating the State aid guidelines for ETS indirect cost compensation, with the view to including additional chemicals.

The document includes a chapter about hydrogen:

"As a producer and consumer of hydrogen, the chemical sector is well positioned to support the development of hydrogen economies in the EU.

/.../

The Commission will support the uptake of renewable and low-carbon hydrogen and the development of related infrastructure. The Commission has also launched a study to assess the effectiveness of the hydrogen framework to identify possible barriers to the upscaling of renewable hydrogen and assess the need for an adjustment of its regulatory framework.

/.../

In addition to other forms of support, the free allocation rules in the EU ETS have been updated to ensure technological neutrality in the carbon leakage protection measures. Therefore, the production of hydrogen via electrolysis has been made eligible to receive free EU ETS emission allowances at the benchmark level set by traditional technologies."

Summary of proposed actions

PFAS

On PFAS (p.16-17), the Commission re-affirms its previous statements regarding a ban for PFAS in consumer uses, while planning to allow for the continued industrial use of PFAS in critical applications “such as health, defence, semiconductors, and others” until adequate alternatives are found. This also follows the position by ECHA and the dossier submitters taken in the 2024 PFAS restriction progress report.

Such derogations will be accompanied by strict conditions regarding emission reductions at all lifecycle stages.

With a focus to find safer alternatives, a new EU-wide PFAS monitoring framework will be developed to centralise information and identify pollution hotspots. The plan shares no concrete details but explains that PFAS pollution clean-up will be based on the polluter pays principle, for which the Commission plans to host a stakeholder dialogue. As already listed in the water resilience strategy, the Commission is look at public-private initiatives to scale technology needed to detect and remediate PFAS.

Overarching actions on chemicals policy

Resilience and level playing field: The Commission plans to establish a Critical Chemicals Alliance to strengthen strategic foresight on risks to production capacity closures and trade challenges. Building on the French proposal for a Critical Chemicals Act, the Alliance will develop criteria for identifying chemical sites and molecules that are critical for the EU’s strategic objectives – serving as a basis for additional support and potential legislative proposals. The plan lists amongst petrochemicals, also olefins, aromatics, methanol, ammonia and chlorine.
- Trade protection: Mentioning little concrete actions, the Commission plans to strengthen exiting tools to respond more quickly to unfair pricing practices, especially on the list of critical molecules once agreed. A package of enforcement and market surveillance actions including the Digital Product Passport will be adopted in Q4 2025.
State aid for affordable energy: With high energy prices as the main pain point, the Commission plans to amend the ETS state aid rules to include additional chemicals sector by Q4 2025. The upcoming Industrial Decarbonisation Accelerator Act and also the environmental omnibus in Q4 2025 will address permitting bottlenecks related to decarbonization of energy-intensive industries.
- Hydrogen boost: A third call under the Hydrogen Bank will soon be launched to support hydrogen production in Europe and help the chemicals sector decarbonize. Additionally, the Communication also highlights that (referring to past legislative actions) the free allocation rules in the EU ETS have been updated to ensure technological neutrality in the carbon leakage protection measures. As such, the production of hydrogen via electrolysis is eligible to receive free allowances at the benchmark level set by traditional technologies.
Decarbonisation support: Several different pots of money have been set aside to support innovation and decarbonization projects including the upcoming Industrial Decarbonisation Bank, aiming to provide up to EUR 100 billion of funding
- Biobased feedstocks: Listing microbial fermentation and enzymes as safer and more sustainable alternatives, the Action plan considers the substitution potential of bio-based material also as a way to further reduce dependencies on imported raw materials.
- Chemicals recycling: Together with the plan, the Commission also opened the consultation on mass balance calculation method under the Single-use Plastics Directive. This will help drive demand for secondary materials.
- CCUS: As part of the Q2/Q3 2026 ETS review, the Commission plans to assess the feasibility of including waste management, as well as the capture of carbon in non-permanent products.
Lead markets: To create sufficient demand for green products, the Industrial Decarbonisation Accelerator Act will introduce EU content requirements.
Innovation and Data management: With the aim to push for innovative, safer and more sustainable chemistries the Commission plans to roll out a Common Data Platform on Chemicals to modernize chemical tasting and make chemical data more accessible.
Simplification agenda: Beside the chemicals omnibus adopted along-side the Action plan, the Commission will adopt will further simplify EU legislation relevant to the EU chemicals industry including 1) an omnibus on environmental permitting and 2) an omnibus facilitating biocontrol in farming.