Europe’s industry warns EU climate policy threatens jobs – DW – 10/23/2025
The Breakdown
Europe’s largest industrial groups in steel, chemicals, and engineering are raising urgent concerns over the EU’s planned climate policies—specifically, the end of free CO2 emission certificates by 2034. Companies including BASF, DuPont, voestalpine, and Thyssenkrupp warn these moves will significantly escalate operating costs, prompting a risk of production shifting to regions outside the EU. The coalition, supported by industry labor unions, is advocating for a reconsideration by EU leadership due to growing cost pressures, global trade competitiveness threats, and potential job losses within energy-intensive sectors.
Analyst View
European specialty chemicals and polymer leaders now face a dramatically shifting operational landscape. The projected stepwise elimination of free emissions allowances introduces not only direct cost increases, but also raises questions around the ability of companies to pass these through the value chain, capture future growth, and maintain profitable footprints in Europe. The response from industrial coalitions and labor organizations points to broad systemic risk, with ripple effects likely across international supply chains, downstream customers, and domestic labor markets.
Decision-makers must evaluate strategic responses amid uncertainty: Will regulatory timelines hold, or will transitional adjustments be forthcoming? The prospects of increased production outside the EU—“carbon leakage”—demand careful consideration of relocation, new partnership models, and investment in decarbonization technologies. Furthermore, multinationals must continually recalibrate forecasts for demand, pricing, and investment in European operations as cost structures realign and trade flows adjust, potentially in real time.
This period is marked by a complex interplay: policy intent, industrial readiness, societal tolerance for economic shock, and evolving global competition. It is imperative for leaders to balance bold sustainability commitments with the realities of market and regulatory volatility.
Navigating the Signals
For leadership in specialty chemicals and polymers, uncertainty now centers on how cost pressures and regulatory shifts will reshape competitive positioning and future market access. The critical near-term challenge is ensuring relevance and resilience when the value proposition, cost base, and customer partnerships may all move simultaneously. Will your innovation and decarbonization investments match the new strategic imperatives emerging from Brussels? Are you prepared for potentially accelerated structural change in your channel and supply chain relationships?
Internally, boards should be asking: How exposed are our core businesses to unmitigated regulatory cost increases? What is our scenario playbook if downstream customers or key channel partners re-evaluate their sourcing models? Where are the highest vulnerabilities—and opportunities—across the supply chain as industry dynamics adjust? These are no longer theoretical questions but urgent strategic directives for 2025 and beyond.
What’s Next?
Breakthrough Marketing Technology supports leadership teams as they navigate rapid and disruptive market transitions. Our advanced market clarity methodology provides structure in times of ambiguity:
- Quantify exposure across business lines, geographies, and operational footprints to policy-driven cost escalation.
- Map value chain vulnerabilities before they materialize into lost business or margin compression.
- Engage with decision-makers to pressure test growth scenarios and risk-mitigation strategies.
In volatile regulatory environments, decisive intelligence and scenario planning become your strongest assets. Let Breakthrough help you transform uncertainty into actionable, forward-focused leadership.
Source
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