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German Chemical Industry Caught Between Global Climate Change and Trump’s Volatility

Climate action remains underprioritized and lacking innovation

Basel, Mannheim, 05/15/2019 – According to the current CHEMonitor poll by CAMELOT Management Consultants and the trade newspaper CHEManager, over 50% of the chemical companies surveyed are already feeling the effects of climate change. The majority of large chemicals companies have recognized the seriousness of the situation and have developed a strategy to protect themselves against the consequences of climate change or have formulated their own climate protection targets. When it comes to climate protection, the German chemicals industry is focusing primarily on increasing efficiency. More than two-thirds of the companies surveyed want to reduce the CO2 footprint of their products.

“When it comes to climate protection, innovative paths such as the use of new production processes or business models for recycling management are still not being pursued enough. The volatility of Donald Trump in the trade dispute with China and the threat of punitive tariffs for the automotive industry are unsettling companies and leading to new prioritizations in investment planning, which also affects environmental protection measures,” comments Dr. Josef Packowski, Managing Partner at CAMELOT, on the CHEMonitor results. Regarding specific climate protection measures, 80% of the chemical companies surveyed stated that they wanted to increase energy efficiency or optimize existing processes. 50% are focusing on recycling management or new production technologies, while only one in five companies would like to use carbon dioxide as a raw material.

Carbon-neutral growth
When asked about their companies’ climate protection targets, 51% of chemical managers said they wanted carbon-neutral growth. 63% of the companies want to reduce the CO2 footprint of their own products and 73% want to reduce their emissions. The German chemical industry is optimistic about achieving the national climate targets – reducing CO2 emissions by 50% by 2030 – with more than half of the respondents considering the goals to be achievable. 46% even believe that the national climate plan will increase the ability to innovative and thus also the competitiveness of the German chemicals industry. Chemicals industry management also sees an opportunity in the decision to phase out coal: 73% of the respondents believe that stepping away from coal accelerates the development of new ideas and solutions for energy supply and thus creates competitive advantages for the German industry.

The right conditions for tackling climate change

For all this, the operational landscape for the German chemicals industry must be right. While German chemical managers are generally satisfied with Germany as a site (86% rated “good”), it is rated last in terms of digitization and energy costs – factors that are important for tackling climate change. Satisfaction with digitization has fallen to a particular low (19% rated “good” or “very good”). “The German chemicals industry sees digitization and artificial intelligence as a forerunner for improving climate protection activities. At present, however, the required regulatory and business conditions don’t seem to be in place in Germany. The message for politicians is loud and clear,” comments Dr. Jörg Schmid, head of the CHEMonitor study at CAMELOT.

For the current 32nd CHEMonitor survey, the CHEMonitor panel of 200 top decision-makers from the German chemical industry, which was established in 2007, was surveyed between February and April 2019.

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