The chemical industry, which generates 1.09 million direct, indirect and induced jobs in Spain and which was consolidated in 2024 as the third exporting sector, behind only the food and capital goods sector, with 59,166 million euros, has raised alarm bells in the face of an economic scenario in which the perfect storm has occurred. On the one hand, an unprecedented increase in the cost of electricity, which started in 2021 with the increase in the cost of gas and CO2 rights, and continued in the following years with the uncontrolled entry of subsidized Chinese and Turkish products into the EU, which generated a loss of competitiveness for the sector.
Although the pharmaceutical industry and consumer chemicals (cosmetics, detergents or paints) have not been affected by this double impact, basic chemicals have been affected by selective production stops since 2023. In the latter subsector, three large groups of producers can be distinguished based on turnover. On the one hand, the two large producers born in Spain such as Moeve (formerly Cepsa) or Repsol, which between the two alone have a turnover of around 3.5 billion euros each. Secondly, large foreign multinationals such as Dow Chemical, DuPont, Covestro or BASF; and, thirdly, a group of Spanish companies that have a turnover of around 1,000 million each, such as Fertiberia, Ercros and Quimidroga.
“These are profiles of large companies, with thousands of employees, with several production centers that are particularly important for the local economy due to the activity they generate, as in the case of the BASF painting center, which is certainly the most important industrial center in all of Guadalajara”, says Juan Antonio Labat, general director of Feique, the employers’ association which includes 500 companies in the sector.
In an interview with five days, recognizes that many of these companies have stopped being competitive and that they are considering, on the one hand, relocating production to other countries with a more competitive electricity price, and on the other, paralyzing the multimillion-dollar investment plans that they have planned in Spain and which amount to 26,000 million euros for the next ten years and 65,000 million for the next 25 years. Labat specifies that the chemical industry plans to invest 2.2 billion per year until 2050, to which another 400 million per year should be added to decarbonize. “Losing a company with these characteristics means losing a very important part of the local economy. This is what happened with the closure of Alcoa in Lugo, on which 30% of local companies depended. Also relevant is the case of Atlantic Copper in Huelva, on which more than 500 companies depend directly or indirectly,” he explains.
Once the risk was identified, employers developed a shock plan to avoid this massive relocation of production and employment along two main axes: a significant reduction in the price of electricity and the imposition of tariff quotas and tariffs on Chinese and Turkish products entering the European Union subsidized and with labor costs and environmental requirements much lower than European ones.
Labat places particular emphasis on reducing the price of electricity and takes the Draghi report as a reference for relaunching European industry, committed to lowering taxes. “We are the only European country to have had a 7% tax on electricity production since 2012. It was created to end the tariff deficit and, although it is scheduled to disappear in 2028, we want it to disappear now or at least to establish a progressive timetable for its disappearance. This would give certainty to businesses.”
Secondly, the director general of Feique is in favor of eliminating the tax on electricity consumption, with an average rate of 5.11%, to lower it to 0.5%, the minimum allowed by the European Council. “Although electricity-intensive industry has already seen an 85% reduction, this reduction would affect other sectors such as automotive, food or textiles.” As regards tolls, the plan provides for an 80% reduction which is structural and does not depend on annual negotiations, while for adjustment services, the measures guaranteed after the April blackout ask that the bill be lowered and that they be introduced not at market prices, but through tolls. “The amount has risen to around 1.5 billion euros because gas pumping and hydraulic pumping are used, which are the fastest, but also the most expensive,” he warns.
