ISTANBUL

The EU plans to provide various support to reduce production costs and increase the competitiveness of the chemical industry in the bloc, according to a statement Tuesday from the EU Commission.

The Commission presented an action plan for the chemicals industry to strengthen the competitiveness and modernization of the EU chemical sector.

"The Action Plan addresses key challenges, namely high energy costs, unfair global competition, and weak demand, while promoting investment in innovation and sustainability," it said.

The EU Commission will establish the "Critical Chemical Alliance" with member states and stakeholders to address risks in the sector, according to the plan.

The alliance will identify critical production sites in need of support while developing solutions to commercial challenges such as supply chain dependencies.

The EU Commission will swiftly implement trade defense measures to ensure fair competition in the chemicals sector. Imports of chemicals will be strictly monitored.

"The Alliance will align investment priorities, coordinate EU and national projects, including Important Projects of Common European Interest (IPCEIs) and support EU critical production sites to boost innovation and regional growth," it noted.

Measures will be taken to help reduce high energy and feedstock costs. "It has introduced clear rules for low-carbon hydrogen and will update state aid to lower electricity costs for more chemical producers by the end of the year."

Chemical producers will benefit from public subsidies to reduce electricity costs.

Additionally, financial incentives and tax measures will be offered to boost demand for clean chemicals.

The measures are expected to save at least €363 million ($425.1 million) annually for the chemicals industry.