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Symposium 2015

Virtual Library File - Europe's low-carbon transition: Understanding the challenges and opportunities for the chemical sector

The Challenge

How to design an industrial policy for Europe, which spurs innovation and enables European industries to lead in the low carbon “space race”? This is a key challenge related to two agendas on wh ...

How to design an industrial policy for Europe, which spurs innovation and enables European industries to lead in the low carbon “space race”? This is a key challenge related to two agendas on which international attention is currently focused: the COP21 of the United Nations Framework Convention on Climate Change in Paris, and Europe's recent agenda for growth, jobs, and competitiveness. Much like climate policy, the need for a new industrial policy is widely acknowledged among politicians, businesses, and the wider society. However, there is little confidence that an innovative and effective industrial policy can be designed to fit all sectors, regions, and stakeholders alike. Yet, with a low carbon market estimated at more than 4.5 trillion euros, progress in this area is vital. One promising approach is to develop a modern understanding of the role of public policy and free markets. With this in mind, the idea of "co-opetition" seeks to stimulate industrial innovation through a combination of both cooperation and competition among countries and enterprises.

In a study on the relationship between emission reductions and competitiveness in the chemical sector, ECF highlights the need for a broader notion of  industrial competitiveness. The report demonstrates the net positive impact that decarbonisation policies could have on stimulating Europe's competitive advantage in this sector. But the study also highlights the increased integration and governance complexity inherent in unlocking the emissions abatement potential from circularity, advanced materials innovation and cross-sector collaboration. It additionally underscores the need to properly recognise where public policies need to support private sector investment. As a major share of identified emission reduction opportunities lie in cross-company and cross-sector integration, the authors raise the question of how industry and policy makers can interact effectively to profit from these opportunities.