Europe’s competitiveness debate is increasingly focusing not only on what industrial policy should achieve, but also on how regulation works in practice.
In its October conclusions on competitiveness, the European Council called for faster progress on the Industrial Accelerator Act (#IAA). At the same time, it underlined the need to remove and prevent Single Market barriers, simplify rules and reduce administrative burdens. More specifically, EU leaders called for streamlined planning and permitting, avoidance of gold-plating and reduced administrative and regulatory burdens, including fewer reporting obligations, particularly for SMEs.
These objectives should go hand in hand.
Applying the competitiveness test to Article 16
This is particularly relevant when considering demand-side measures for chemicals under Article 16. Chemicals are not a single product category. They are essential inputs underpinning a wide range of industrial value chains, each with different technologies, applications, supply chains and market realities. Demand-side measures therefore need to reflect this diversity and consider their effects across interconnected value chains.
For the adhesive and sealant industry, this diversity is easy to illustrate. Adhesives and sealants are used in applications ranging from wind turbines and electric vehicle batteries to food packaging, medical devices and construction products. A measure that creates meaningful demand in one market cannot automatically be assumed to deliver the same benefits in another.
This is why implementation matters.
Before introducing demand-side requirements, priority value chains and end markets should be identified and assessed individually. This should include material and feedstock availability, technological readiness, costs, administrative burdens and downstream impacts. If measures are introduced, this should only be done where they can genuinely influence purchasing decisions and create meaningful market demand.
Targeted measures, informed by value-chain realities
FEICA is therefore calling for a transparent workplan identifying priority value chains and end markets, followed by targeted impact assessments before new requirements are adopted. Structured consultation with affected stakeholders is equally important to ensure that policy decisions reflect the realities of individual value chains.
Any new measures should also follow the Commission’s Better Regulation principles, including the ‘Competitiveness Check’ set out in Tool #21 of the Better Regulation Toolbox. Systematically assessing impacts on innovation and competitiveness would help ensure that Europe’s industrial ambition strengthens the ability of diverse and interconnected value chains to innovate, invest and compete rather than creating new layers of regulation.
This is particularly important when considering new reporting obligations. What may appear proportionate in isolation can become a significant burden when requirements accumulate across different pieces of legislation, particularly in a sector where 85% of companies are SMEs. Industrial acceleration should tackle complexity, not add to it.
The European Council has made simplification and reduced administrative burden part of Europe’s competitiveness agenda. The same principle should now guide the IAA and the implementation of Article 16. A transparent, evidence-based and value-chain-specific approach would help ensure that the IAA supports investment and innovation without creating new layers of complexity. If simplification is a competitiveness priority, the IAA itself must pass the test.
Read more about FEICA’s position on the Industrial Accelerator Act here: https://www.feica.eu/eu-policy/innovation-competitiveness/industrial-accelerator-act/