Decarbonization not deindustrialization: Why Europe needs industry to deliver climate solutions

Key takeaways:

  • To meet the EU’s net zero 2050 ambitions, industry investments will need to increase significantly.
  • ExxonMobil plans to spend $20 billion globally on lower-emission investments from 2022 through 2027, but unless policies change, it will be difficult to spend part of those funds in Europe.
  • Policy plays a key role in making Europe attractive for the projects and technologies needed to help advance the energy transition.

Philippe Ducom

President, ExxonMobil Europe

I have a special place in my heart for European industry and the scientists, engineers and technicians who power it.

As a native European, whose career began as a chemical engineer in Normandy, I want to see companies like ExxonMobil help Europe achieve its net zero ambitions.

But unless governments make industrial competitiveness central to the next EU institutional cycle, the future of European industry – and the Green Deal – is at risk.

Europe needs a business case – urgently

It’s no secret that any person running a business – whether it be a global company or a fledgling start-up – needs the economics to make sense. Right now, that’s not the case in Europe.

Expensive energy and labor, coupled with regulatory burdens, negatively impact the EU and its ability to attract the investments needed for the energy transition.

We are disappointed by the European Union’s pending approval of the Corporate Sustainability Due Diligence Directive (CSDDD), which introduces multiple additional layers of regulatory burden through onerous due diligence requirements. Doing business in the EU is becoming more and more complex, which discourages long-term investments.

Europe already has a significant attractiveness deficit compared to many countries in the world. This is not helping.

That’s why I recently signed, on behalf of my company, the Antwerp Declaration for a European Industrial Deal, which calls for clarity, predictability and confidence in Europe and its industrial policy.

Image Photo provided by CEFIC

Photo provided by CEFIC

Policy implications on investments

EU policies profoundly impact industry and investment decisions.

When deciding where to invest, ExxonMobil prioritizes regions with clear and long-term policies that support competitive returns.

Unfortunately, Europe's current policy landscape doesn’t facilitate innovative projects. Regulations change, environmental targets are accelerated, and taxes are increased retroactively.

We aren’t the only ones who are concerned.

According to a recent European Roundtable for Industry survey, 84% of company leaders believe Europe’s competitiveness is weakening.

At our Antwerp facility, we’d like to build an advanced recycling unit, which would turn hard-to-recycle plastics into new and valuable products – key in helping Europe meet its circularity goals. But it is challenging to obtain the necessary permits.

We started up a similar facility in Baytown, Texas, along the Gulf Coast in the United States. Over there, we now have the capability to process up to 40,000 metric tons (88 million pounds) of plastic waste per year. Let me put that into perspective: that’s the equivalent of the weight of about four Eiffel Towers.

We want to invest in advanced recycling in Europe, but it must make business sense.

Commitment to reducing emissions

Despite these challenges, we remain committed to reducing our scope 1 and 2 emissions from operated assets. We also see opportunities to use our core capabilities to help other companies reduce theirs in support of Europe's aspirations for a sustainable future.

Eighty percent of energy-related global CO2 emissions come from three sectors: industrial sources, power generation and commercial transportation. We’re scaling up lower-emissions solutions for these key industries with technologies like carbon capture and storage, hydrogen and lower-emission fuels. We also plan to become a leading producer of lithium for electric vehicle batteries.

Achieving emission-reduction goals requires more than corporate initiatives. It demands collaborative efforts and market-based, technology-neutral policies that support competitive returns.

Belgian Prime Minister Alexander De Croo said it himself: ‘’We need our industry for their innovation capacity to come up with tomorrow’s climate solutions. That is why Europe should not only be a continent of industrial innovation but should remain a continent of industrial production.”

Working together to help keep industry in Europe

I urge governments and industry stakeholders to unite, listen to the concerns of companies like ours and establish a policy framework that nurtures innovation, drives investment and secures the long-term competitiveness of European industries.

We’ve already seen signs of deindustrialization in Europe – plants are running at reduced rates and sites are being closed. The time to act is now.

As Europe sets its strategic agenda for the next five years, it must make clear that decarbonization through deindustrialization is unsustainable – for the climate, our citizens and our companies. Together, we can surmount the challenges ahead and pave the way for a more sustainable future in Europe.

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Philippe Ducom is the President of ExxonMobil Europe.

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