With low-energy fanfare, the European Commission has released its ‘winter package’, a document that outlines its energy policy for the coming years. The proposed legislation is a bold and far-reaching swathe of laws that will form the bedrock of the EU’s efforts to meet Paris COP21 climate change targets.

However, many have been left disappointed by the move, complaining that the plans were released before consulting industry heads, that the focus on switching to renewable energy sources doesn’t go far enough, or that in trying write an energy policy for all of Europe’s diverse economies and industries, the legislation pleases no one.

Certainly the proposals are grand. As the Guardian reports, “In total, eight pieces of legislation were proposed today [30/11/2016], covering a dizzying array of issues from electricity market design to energy poverty, and from biofuels to security of supply.” So it is no wonder if some of the laws miss their targets, or if some noses are put out of joint.

The Guardian continues by noting how a number of environmental groups that see the winter package as a missed opportunity. Reporting how, “Jonathan Gaventa of E3G called the legislation ‘politically cautious’ while ClientEarth lawyer Maria Kleis-Walravens dubbed it ‘disappointing in the extreme’. [Whereas] Sini Eräjää, a spokeswoman for BirdLife Europe, said: ‘Ignoring science and brushing aside evidence of the destructive impacts of current use will not make these problems go away. It will more likely make them worse.’”

Cefic, The European Chemical Industry Council, however, has been generally positive about the proposals. Stating that, “This package represents a business opportunity for chemical companies. The Energy Performance of Buildings Directive, Energy Efficiency and Renewable Energy Directive will generate business opportunities for the European chemical industry. We manufacture products for energy savings, solar cells and windmills, insulation and lighter cars. The construction industry is the chemical industry’s second biggest customer, amounting to 8% of total chemical demand. Cefic stresses the importance of the circular economy of CO₂ through the integration of carbon capture and utilisation (CCU) as an option for the future.”

Although the agency is critical of what it sees as some policy flip-flopping, stating that, “While many elements of the package are well designed, others are not – jumping from supporting renewables to supporting capacity payments being one case.”

It has also been noted by others that, “The [EU] bloc has pledged to phase out subsidies for food-based energy crops, but the revised renewable energy directive released only whittles down a cap on such biofuels from 7% in 2020 to 3.8% in 2030.” Bringing into question exactly what direction Brussels is heading on the matter.

Others argue that synthetic fossil fuels should be removed from the EU’s way of thinking. For example, Bellona [an independent, environmental NGO] simply states that, “Synthetic fossil fuels are not renewable, nor sustainable, economically or in any other way. Capturing CO₂ from industrial facilities and preventing it from entering the atmosphere is, indeed, a major step in decarbonising industry. However, using that CO₂ to make synthetic fossil fuels, after which the CO₂ is deposited in the atmosphere during fuel combustion, is costly, energy-demanding, and does not make sense from a climate perspective.” Leading them to “urge” that, “synthetic fuels, produced with waste-stream industrial CO₂, be left out of the Renewable Energy Directive.”

Perhaps the diplomats are overreacting. After all, while Bellona is right to state that, “this [winter] package forms the Commission’s official position vis-à-vis the Union’s climate and energy policy towards 2030.” It also notes that the policies are not yet legally binding and are, “still pending negotiation and approval by the European Parliament and Member States.”

So once the horse trading and special interests of national governments begin to apply further influence, it is quite possible that the ‘winter package’ will be an entirely different beast. Although the chemical industry, with its long-term investment requirements, will prefer a quicker resolution of how the continent plans to combat climate change.

It is already reeling under the expense of increasing levels of bureaucracy. The introduction of REACH, amongst other layers of red-tape, is proving costly. As ICIS highlighted in June 2016, “EU chemical regulation costs firms across the 28-country bloc €9.5bn/year, according to the long-awaited cumulative cost assessment [recently] published by the European Commission.” Adding that this, “represented around 2% of turnover and 12% of the value added.”

When combined with fluctuating oil prices, an unstable logistics market, US shale gas development, political uncertainty at home, and economic uncertainty in China, analysts are not surprised that the chemical industry is stagnating.

While the EU’s introduction of a ‘winter package’ will NOT be the end of the European chemical industry, its timing is unfortunate. Or maybe even irrelevant, for after all, when the bureaucrats have set the targets, and the caps and subsidies have been named, it is primarily consumer demand that will fire recovery.

As Cefic’s Director General, Marco Mensink, said upon reading the ‘winter package’ and what it had in store for the chemicals industry; “It is markets, not targets that will drive change.” Something which chemical traders, plastics manufacturers, agrichemical product developers, and anyone else who works in the chemicals industry would do well to remember.