European chemical suppliers 2050 may seem like a distant and future year, but it will come earlier than we think, just like getting older or the end of students’ summer vacation.
Today, the European chemical industry is in a strong and stable position. It’s a 650 billion euro industry, made up of more than 28000 companies, directly employing 1.2 million people and supporting 19 million jobs across the supply chain. However, its future is far less certain than it is now, which raises two key questions about what Europe’s chemical industry will look like in 2050. Which factors have the greatest impact on the chemical industry in Europe? How will chemical companies in Europe respond to these changing impacts?
Which factors have the greatest impact on the chemical industry in Europe?
The global economy in 2050 will bring different challenges to European chemical suppliers.
As the European Chemical Trade Organization Cefic clearly pointed out in its mid-century vision report, “Global trade flows have changed significantly due to technological development and increasingly isolated regional politics, which hinder multilateralism and disrupt the value chain.” The degree of economic and political integration in most regions is higher, but the degree of division between regions is higher. China and India have developed into leading economies in the world, and Africa has developed into an important market. ”
In particular, the report stressed that “by 2030, China may account for more than half of global chemical production, while the European Union and the United States only account for a quarter of global production.”
As GDP growth in developed economies continues to slow, this shift in global chemical industrial production will accelerate in the next few years. By 2050, for example, the European economy is expected to grow at only 1% a year.
At the same time, developing economies will narrow the gap between the rich and the poor and eliminate many of Europe’s long-standing industrial advantages, such as investment capital, infrastructure, healthy domestic market, educated labor force and superior research facilities.
Changes in the global economy and the chemical market will mean that the European chemical industry will have to find alternative leverage.
How will European chemical suppliers respond to these changing impacts?
European political and business leaders may want to regain the economic advantage in two key areas:
1. Maintain the leading position in the market of high-value chemicals
The European chemical industry is likely to continue to expand in the high-end chemical product market, mainly because it is a major growth area in its domestic market.
As a result, European chemical suppliers are expected to produce more advanced products, such as energy-saving insulation materials, coagulants for phosphate recovery from wastewater, advanced materials for the growing battery industry, composites for solar panels and wind turbines, nanomaterials, complex inks, and compounds for 3D printing, And lightweight composites for the automotive industry.
2. Low-cost renewable power
The European chemical industry is the largest consumer of the electric power industry in Europe. As the impact of climate change becomes more and more important in the next 30 years, economies will need to shift to more renewable energy. In many areas of this technology, Europe is far ahead.
As the Cefic report boasts, “since 1990, our (European chemical industry) greenhouse gas (GHG) emissions have decreased by nearly 61%, while our production has increased by 83%.” By 2050, based on our understanding of today’s technology, we think we can reduce greenhouse gas emissions by another 50% at today’s level. ”
Many of these renewable energy sources are in place, but European chemical products are still competitive in price compared with fossil fuel-based products in the Middle East, the United States and China.
At the same time, the European chemical industry is trying to maintain its position in the global market, but ironically its position in the European economy will become stronger.
This is because the chemical industry in Europe has been growing faster than most other industries, including the GDP of the European continent for most of the previous 30 years. As this trend continues, the strength of the European chemicals industry will also grow, enabling it to consolidate its position in regulatory policy, national financial support, capital investment, and research funds.
Moreover, as the European economy continues to shift more towards services (at the expense of production), chemical suppliers will become increasingly important as bastions of real output.