June 15, 2024
Blog by David Wawer, Executive Director, CPMA
While attending the recent ETAD General Assembly meeting, held on May 23-24 in Zurich, Switzerland, I had the opportunity to hear industry presentations about proposed chemicals laws and regulations in the EU. As the regulatory landscape continues to evolve, European manufacturers continue to face costly regulatory requirements.
During the past six years, the European Chemicals Agency (ECHA) has mandated new chemicals research studies requirements for organic pigments EU REACH dossiers (Nanomaterials, SVHC), as well as new data studies for precursor raw materials used to manufacture pigments. To continue manufacturing and selling products in Europe, companies have been faced with significant costs to meet new regulatory requirements. The EU Commission Green Deal, focused on plastics recycling and emissions, has also added new regulatory requirements for EU manufacturers, as well as EU consumers, which continue to accelerate business operating costs in Europe.
The Russia-Ukraine war, which facilitated energy cost increases of 500% to 1000% for EU manufacturers and consumers since 2021, continues to influence pigments manufacturing conditions in the EU. At the beginning of the war, EU Member States were forced to subsidize (pay for) energy cost increases, many of which have ended or are about to end. Alternative energy, particularly windmills and solar panels, have been added to the mix of EU energy sources, but at high cost and inconsistent availability. LNG gas from the USA and other regions has filled a significant gap in energy demand by EU manufacturers. All of these conditions have resulted in EU manufacturers beginning to explore lower cost regions of the world for their manufacturing operations.
The combination of costly regulations, Green Deal mandates, high energy cost, fear of war, and consumer inflation continue to influence business decisions and economic outcomes for companies in the EU.
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