Europe’s chemical industry has reached a breaking point. The warning lights are no longer blinking — they are blazing. Unless Europe changes course immediately, we risk watching an entire industrial backbone, with the countless jobs it supports, slowly hollow out before our eyes. Consider the energy situation: this year European gas prices have stood at 2.9 times higher than in the United States. What began as a temporary shock is now a structural disadvantage. High energy costs are becoming Europe’s new normal, with no sign of relief. This is not sustainable for an energy-intensive sector that competes globally every day. Without effective infrastructure and targeted energy-cost relief — including direct support, tax credits and compensation for indirect costs from the EU Emissions Trading System (ETS) — we are effectively asking European companies and their workers to compete with their hands tied behind their backs. > Unless Europe changes course immediately, we risk watching an entire > industrial backbone, with the countless jobs it supports, slowly hollow out > before our eyes. The impact is already visible. This year, EU27 chemical production fell by a further 2.5 percent, and the sector is now operating 9.5 percent below pre-crisis capacity. These are not just numbers, they are factories scaling down, investments postponed and skilled workers leaving sites. This is what industrial decline looks like in real time. We are losing track of the number of closures and job losses across Europe, and this is accelerating at an alarming pace. And the world is not standing still. In the first eight months of 2025, EU27 chemicals exports dropped by €3.5 billion, while imports rose by €3.2 billion. The volume trends mirror this: exports are down, imports are up. Our trade surplus shrank to €25 billion, losing €6.6 billion in just one year. Meanwhile, global distortions are intensifying. Imports, especially from China, continue to increase, and new tariff policies from the United States are likely to divert even more products toward Europe, while making EU exports less competitive. Yet again, in 2025, most EU trade defense cases involved chemical products. In this challenging environment, EU trade policy needs to step up: we need fast, decisive action against unfair practices to protect European production against international trade distortions. And we need more free trade agreements to access growth market and secure input materials. “Open but not naïve” must become more than a slogan. It must shape policy. > Our producers comply with the strictest safety and environmental standards in > the world. Yet resource-constrained authorities cannot ensure that imported > products meet those same standards. Europe is also struggling to enforce its own rules at the borders and online. Our producers comply with the strictest safety and environmental standards in the world. Yet resource-constrained authorities cannot ensure that imported products meet those same standards. This weak enforcement undermines competitiveness and safety, while allowing products that would fail EU scrutiny to enter the single market unchecked. If Europe wants global leadership on climate, biodiversity and international chemicals management, credibility starts at home. Regulatory uncertainty adds to the pressure. The Chemical Industry Action Plan recognizes what industry has long stressed: clarity, coherence and predictability are essential for investment. Clear, harmonized rules are not a luxury — they are prerequisites for maintaining any industrial presence in Europe. This is where REACH must be seen for what it is: the world’s most comprehensive piece of legislation governing chemicals. Yet the real issues lie in implementation. We therefore call on policymakers to focus on smarter, more efficient implementation without reopening the legal text. Industry is facing too many headwinds already. Simplification can be achieved without weakening standards, but this requires a clear political choice. We call on European policymakers to restore the investment and profitability of our industry for Europe. Only then will the transition to climate neutrality, circularity, and safe and sustainable chemicals be possible, while keeping our industrial base in Europe. > Our industry is an enabler of the transition to a climate-neutral and circular > future, but we need support for technologies that will define that future. In this context, the ETS must urgently evolve. With enabling conditions still missing, like a market for low-carbon products, energy and carbon infrastructures, access to cost-competitive low-carbon energy sources, ETS costs risk incentivizing closures rather than investment in decarbonization. This may reduce emissions inside the EU, but it does not decarbonize European consumption because production shifts abroad. This is what is known as carbon leakage, and this is not how EU climate policy intends to reach climate neutrality. The system needs urgent repair to avoid serious consequences for Europe’s industrial fabric and strategic autonomy, with no climate benefit. These shortcomings must be addressed well before 2030, including a way to neutralize ETS costs while industry works toward decarbonization. Our industry is an enabler of the transition to a climate-neutral and circular future, but we need support for technologies that will define that future. Europe must ensure that chemical recycling, carbon capture and utilization, and bio-based feedstocks are not only invented here, but also fully scaled here. Complex permitting, fragmented rules and insufficient funding are slowing us down while other regions race ahead. Decarbonization cannot be built on imported technology — it must be built on a strong EU industrial presence. Critically, we must stimulate markets for sustainable products that come with an unavoidable ‘green premium’. If Europe wants low-carbon and circular materials, then fiscal, financial and regulatory policy recipes must support their uptake — with minimum recycled or bio-based content, new value chain mobilizing schemes and the right dose of ‘European preference’. If we create these markets but fail to ensure that European producers capture a fair share, we will simply create new opportunities for imports rather than European jobs. > If Europe wants a strong, innovative resilient chemical industry in 2030 and > beyond, the decisions must be made today. The window is closing fast. The Critical Chemicals Alliance offers a path forward. Its primary goal will be to tackle key issues facing the chemical sector, such as risks of closures and trade challenges, and to support modernization and investments in critical productions. It will ultimately enable the chemical industry to remain resilient in the face of geopolitical threats, reinforcing Europe’s strategic autonomy. But let us be honest: time is no longer on our side. Europe’s chemical industry is the foundation of countless supply chains — from clean energy to semiconductors, from health to mobility. If we allow this foundation to erode, every other strategic ambition becomes more fragile. If you weren’t already alarmed — you should be. This is a wake-up call. Not for tomorrow, for now. Energy support, enforceable rules, smart regulation, strategic trade policies and demand-driven sustainability are not optional. They are the conditions for survival. If Europe wants a strong, innovative resilient chemical industry in 2030 and beyond, the decisions must be made today. The window is closing fast. -------------------------------------------------------------------------------- Disclaimer POLITICAL ADVERTISEMENT * The sponsor is CEFIC- The European Chemical Industry Council  * The ultimate controlling entity is CEFIC- The European Chemical Industry Council  More information here.

The energy landscape is always evolving, and another challenge is rapidly coming into view: data. The rise of artificial intelligence (AI), cloud computing and machine learning is driving unprecedented demand for electricity. This trend is only set to accelerate as the UK seeks to establish itself as a global leader in AI. The UK government has rightly committed to being an ‘AI maker, not taker’. But that ambition comes with consequences. According to the National Grid’s Future Energy Scenarios 2024, data centers could become one of the UK’s fastest-growing sources of demand by the 2030s. AI data centers are used to train the most advanced AI, including frontier models such as ChatGPT, and require vast amounts of energy due to their continuous utilization. We cannot meet this surge in demand simply by layering data center load on top of an already stretched energy system. COORDINATION WILL BE CRITICAL Last month, a report from Aurora Energy Research highlighted that an uncoordinated approach to power sourcing could see power sector emissions increasing by 14 percent, which would directly undermine the UK’s decarbonization goals and drive up wholesale electricity prices. > Without change, we risk slowing down both the deployment of AI infrastructure > and our energy transition. Instead, we need a coordinated way to unlock the potential of the AI sector. The current approach, where most data centers cluster around areas like London and the Thames Valley, driven by proximity to demand, is unsustainable. These regions are often far from large-scale sources of generation and already face grid constraints such as network connection bottlenecks. Different thinking is viable for data centers geared toward AI workloads, which are less sensitive to latency — the delay of data transfer — and therefore do not need to be sited close to major cities. Without change, we risk slowing down both the deployment of AI infrastructure and our energy transition. To help mitigate this risk, we should align our energy and digital strategies more closely. That starts with a national framework to strategically site new data centers in areas with available grid capacity, preferably close to power generation sources. Drax Power Station could be one of those locations. via Drax CO-LOCATING DATA CENTRES AND POWER GENERATION In 2024 Drax Power Station was the UK’s single largest source of renewable power by output. Our site in Selby, North Yorkshire, provides approximately 2.6 GW of dispatchable power capacity, enough power for five million homes. Unlike intermittent renewables, Drax generates power whether or not the wind is blowing or the sun is shining. But the site’s potential reaches beyond what it delivers today. We already benefit from planning consents, which — alongside the right policy support and regulatory framework — could allow us to transform Drax into the world’s largest engineered carbon removals facility by installing bioenergy with carbon capture and storage (BECCS) on two of our generating units. BECCS is unique. It is the only technology that can simultaneously generate renewable power and remove carbon dioxide from the atmosphere. And, significantly, co-locating a data center with the power station could help enable the delivery of this world leading technology. > Building data centers next to power stations brings multiple advantages. It > enhances system resilience and reduces the risk of plant curtailment. It > minimizes energy lost in transmission, something that becomes more pronounced > the further electricity has to travel. Large power stations like Drax Power Station were designed to support industrial-scale generation. They have substantial grid connections, large surrounding estates and access to cooling water. These attributes make Drax Power Station uniquely suited for the possibility of hosting a hyperscale data center. Building data centers next to power stations brings multiple advantages. It enhances system resilience and reduces the risk of plant curtailment. It minimizes energy lost in transmission, something that becomes more pronounced the further electricity has to travel. It also supports the connection of new energy capacity by relieving congestion on the grid queue. Unlocking this potential, however, will require a rethink of current regulations. SEIZING THE OPPORTUNITY At present, power stations are restricted from supplying electricity simultaneously to both the grid and a private off-taker such as a data center. These rules were written for a different era, one that did not anticipate intense energy consumers such as AI clusters emerging as a major player in the energy ecosystem. By unpicking these constraints, we can free up untapped capacity, provide flexible solutions for energy security and support the digital infrastructure needed to drive economic growth. The government’s recent announcement of AI Growth Zones is a welcome step. If designed properly, this initiative could be the catalyst for a strategic rollout of AI infrastructure across the UK. Rather than clustering growth in already congested urban areas, Growth Zones can enable us to locate data centers where power is plentiful, where local communities stand to benefit from investment and where the grid can accommodate growth. This is about more than just plugging in servers. It’s about creating a coherent and forward-looking strategy that links where we generate power to where we use it — and recognizes that AI and energy are now inextricably linked. Subject to clear government policy support and milestones, combining BECCS with a large-scale data center at Drax Power Station could align with this industrial strategy. Together, these developments could create the option for a globally unique proposition: a carbon negative data center — delivering world-leading innovation for the UK and directly countering the perspective that AI growth will mean more carbon emissions.   These projects could protect and create thousands of high-quality jobs in a region that has historically powered the UK but that now faces the risk of deindustrialization as a result of declining heavy industry. A joined-up plan for energy and digital growth can offer lasting economic resilience to communities that need it the most. > It’s time to think smarter about how we build, power and place the critical > infrastructure of the 21st century. At Drax, we are ready to be part of that future. We are already a leading renewable energy generator in the UK and we have the infrastructure and ambition to implement a cutting-edge data center solution at Drax Power Station, helping the country secure its place as a digital leader while keeping the lights on. It’s time to think smarter about how we build, power and place the critical infrastructure of the 21st century. We must ensure new data capacity is integrated in ways that enhance grid stability without compromising the transition to clean energy or negatively affecting the needs and rights of local communities. With the right strategy, the UK doesn’t have to choose between energy security and digital growth. We can achieve both.