The European chemical industry is worried about the IRA shock

Recently, in the context of the European energy crisis, executives in the European chemical industry said that Europe's low-carbon development is being hit by the US Inflation Reduction Act (IRA), and Europe urgently needs to set a clearer low-carbon development direction
for the chemical industry.

European chemical industry executives say the EU's Green Deal and Carbon Reduction 55 Package are outdated compared to the U.
S.
I.
S.
I.
S.
and aim to punish polluters rather than encourage positive, lasting change
.
They argue that European countries have ambitious emissions reduction targets and net-zero targets, but lack supportive, incentive-driven policies
.
The European Union, for example, is phasing out free CO2 allowances in its emissions trading system and introducing the much-criticized carbon border adjustment mechanism
.
These measures, combined with the controversial Sustainable Chemicals Strategy, are detrimental to investment
in the EU.
By comparison, the IRA will provide an estimated $370 billion worth of subsidies and tax breaks to U.
S.
businesses involved in the energy transition, including credits
for U.
S.
consumers buying electric vehicles.

Marko Mensenck, Director General of the European Chemical Industry Council, said: "The US IRA has completely changed the landscape
of the global decarbonisation race.
We face the challenge of achieving zero carbon emissions by 2050, and for this we need to make a major breakthrough
in 2030.
Clearly, now is the
time to invest in the next generation of industry.
In this regard, the United States is currently in the lead, and the EU is in a difficult position on competition, as it prohibits direct subsidies or tax breaks
in most cases.
”

The U.
S.
is preparing to invest heavily in carbon capture and storage (CCS), low-carbon technologies, electric vehicles, and improving the thermal and energy efficiency
of housing.
Developments such as these will increase demand for numerous chemicals and polymers and encourage chemical companies to invest in
new technologies.
The IRA has increased tax credits for carbon capture, and the price increase is enough to incentivize CCS projects
.
Chemical companies are also looking to invest in more climate-friendly processes and solutions in order to gain a leading position
in the global competition.
But in Europe, chemical companies need greater regulatory
certainty.

Tom Crotty, president of the Chemical Industry Association (CIA), also said Europe needed its own IRA
.
Crotty noted: "The UK chemical industry has huge opportunities
in the energy transition for technologies such as hydrogen and CCS.
If we want to succeed in these technologies, now is the time for governments to take bold and decisive action
.
”

There have also been calls in Europe for a response
to the US IRA.
Some politicians believe that the IRA has the potential to suck investment out of Europe at a time when it is most needed, especially as the
energy crisis is expected to continue.