As we step into the new year, the chemical industry finds itself at the crossroads of unprecedented challenges and opportunities. The legislative and regulatory landscape is ever evolving, shaped by global tends, technological advancements, and a growing emphasis on sustainability. As chemical companies strategize and fine-tune their plans, several notable trends are expected to shape the landscape in 2024.
Delayed Growth
The chemical industry, as highlighted in BASF’s “Outlook for the Chemical Industry” report, faced a period of postponed growth throughout 2023. Although initial expectations suggested a potential upswing at the start of 2024, indications point towards a continuation of this trend into the upcoming year. Industry forecasts hint at growth materializing in the latter half of the new year, potentially extending into 2025. Despite the current ambiguity, it appears that a full year will pass before the market is ready for expansion.
Emphasis on Efficiency
Anticipating reduced growth and potential slowdown in consumer spending, 2024 will witness companies prioritizing cost-consciousness. In response, efficiency becomes paramount. Patrick Hore, Global Vertical Head of Chemicals at Maersk, emphasizes the importance of chemical business enhancing their efficiencies while preparing for the future. This involves cost reduction in the supply chain through improved visibility and strengthened partnerships. Expect increased investments in software utilizing cloud-based platforms, artificial intelligence (AI), and other technologies for predictive analytics, aiding in refining decisions related to procurement volumes and logistics. The goal is to enhance efficiency, anticipate delays, and minimize disruptions across the entire supply chain.
Enhanced Commitment to Sustainability
The year 2024 will witness a tightening of environmental regulations, particularly in response to the chemical sector’s significant role as the largest industrial energy consumer and the third largest in direct CO2 emissions. To align with sustainability goals, businesses in the chemical industry will need to accelerate waste reduction efforts and commit to initiative that reduce their environmental impact. Compliance with the new “European Commission Decisions” and the EU Chemicals Strategy for Sustainability, introduced in 2022, will be a priority. This involves adopting practices to decouple from fossil fuel dependencies, phase out polluting products, and embrace circular economy principles.
“Chemistry as a Service”
Advanced, specialty chemical producers are expected to engage in collaborative partnerships with end customers, such as semiconductor or automotive producers, offering high-tech solutions on a service basis rather than traditional sales, Referred to as “chemistry as a service,” this trend contributes to the circularity of materials and chemicals, with a focus on designing reverse logistics for recycling and repurposing.
The legislative and regulatory landscape for the chemical industry in 2024 presents a dynamic and evolving environment. Proactive adaptation and compliance with emerging legislative frameworks will not only ensure legal adherence but also position businesses to thrive in a global marketplace increasingly focused on sustainability and responsible chemical practices.