The newly-launched Cumulative Cost Assessment (CCA) study of the European Commission shows that the cost of implementing major regulations for the European chemical industry doubled between 2004 and 2014. Europe’s regulatory framework for chemicals, along with industry’s own efforts, plays an essential role in ensuring the protection of human health and the environment. However, it also poses a significant burden on EU chemical companies.
The total cost as a result of EU legislation borne by chemical companies from six sub-sectors between 2004–2014 amounts to about 10 billion euro per year or to 12 % of the value added of the EU chemical industry. Variations between subsectors range from nearly 3 % for plastics to 23 % for crop protection products. Compared to Gross Operating Surplus, the additional cost reaches 30 %. Among the legislation packages, the three main drivers of regulatory cost are regulations on industrial emissions, generating 33 % of the cost, chemicals, with 29 %, and worker safety, with 24 %. Energy legislation also contributes to the cost, especially after 2012. The chemical industry will face an increasing cost to comply with stricter emission limit values, with more ambitious CO2 emission reduction targets and energy efficiency objectives.
The report does not allow conclusions about the impact of regulation costs on global competitiveness. To do so, in a second phase, the study will compare these costs to other regions. Anyway, Cefic promised to continue to explore with the EU institutions how the regulatory framework can be made more cost-effective and fit for purpose while upholding the same high level of safety, health and environmental protection.