- European Commission announces comprehensive Action Plan to revamp chemical industry.
- New Critical Chemical Alliance to identify vulnerable sites and coordinate investment.
- €363 million in annual savings expected from regulatory simplification.
- PFAS restrictions, decarbonization incentives, and clean chemical innovation prioritized.
- ECHA reform to modernize oversight and fulfill new EU regulatory mandates.
Driving the news: On July 7, the European Commission unveiled a sweeping Action Plan aimed at revitalizing the EU’s vital chemicals sector, while simultaneously reducing regulatory burdens and boosting clean-tech innovation.
Why it matters: Europe’s chemical industry underpins nearly every manufacturing sector. With over 29,000 companies and 1.2 million jobs, it’s a backbone of the EU economy. However, high energy costs, global competition, and regulatory complexity have weakened its edge — prompting urgent action.
The big picture
The Chemicals Industry Action Plan is the third industrial strategy of the Commission’s current mandate, following those for the automotive and steel sectors. It outlines four major pillars: resilience and fair competition, affordable energy and decarbonization, innovation and lead markets, and PFAS regulation. It is accompanied by a sixth “Simplification Omnibus” to reduce red tape.
Key measures include
- Critical Chemical Alliance: A new EU-wide body to pinpoint production sites at risk of closure, ensure trade fairness, and guide joint investments like Important Projects of Common European Interest (IPCEIs).
- Energy affordability and decarbonization: Expansion of the Affordable Energy Action Plan, hydrogen incentives, revised state aid rules, and public consultation on chemical recycling improvements.
- Market incentives: Tax measures, EU content rules under the upcoming Industry Decarbonisation Accelerator Act, and funding through Horizon Europe (2025–2027) to support sustainable substitutes and circularity.
- PFAS crackdown: Swift restrictions on harmful per- and polyfluoroalkyl substances, with allowances for essential use, and investment in safer alternatives and remediation.
Between the lines
The Commission’s sixth Simplification Omnibus is expected to save at least €363 million annually by aligning chemicals, cosmetics, and fertilizer rules with broader EU standards. The reform reduces duplication under REACH, streamlines labelling, and clarifies compliance procedures — particularly benefiting SMEs.
Additionally, reforms to the European Chemicals Agency (ECHA) will expand its financial and operational capacity, enabling oversight of new mandates related to hazardous waste, product safety, and cross-border trade controls.
What they’re saying
– Stéphane Séjourné, Executive VP for Prosperity and Industrial Strategy
– Valdis Dombrovskis, Commissioner for Economy and Productivity
– Jessika Roswall, Commissioner for Environment and Competitive Circular Economy
What’s next
The Commission plans swift implementation of PFAS restrictions after the European Chemicals Agency issues its opinion. Meanwhile, investments from Horizon Europe and state-supported energy reforms will begin shaping the market by late 2025. Industry response and national adoption will determine the Plan’s long-term success.
Reporting based on the official European Commission press release dated July 7, 2025.
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