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The Chemical Industry
The chemical and pharmaceutical industry is fundamental to modern society. With an immense variety of products, from vital medicines and foods, the construction of buildings, to transport and leisure, the industry truly does have an impact on virtually every aspect of our daily lives.
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Project 2035: A decade of opportunity
The Chemical Industries Association joined forces with S&P Global to take an independent look at the current and near-future resilience of the chemical industry in the UK based on desk research and widespread industry engagement.
Why we matter
- The industry of industries: The chemical industry is an integral part of everyday life. Delivering solutions to current and future challenges is central to everything the sector does, from saving lives, powering the energy transition and building greener and cleaner means of transportation.
- The economic contributor: The sector is one of the biggest manufacturing sectors by employment, paying 21% higher than the manufacturing average and 27% higher than the UK average. These well-rewarded jobs are located in parts of the country where they are essential to the local economy. The sector is also highly productive, with GVA per employee at around 300% higher than the whole economy average. Accounting for 15% of UK exports, it is the second largest manufacturing exporter.
- The critical provider: The sector is directly part of the country’s critical national infrastructure, with its products directly underpinning other key areas such as Defence, Energy, Health and Water.
- The sector’s gradual decline is now at a breaking point: The UK has experienced almost a 40% fall in chemical production across the country since January 2021 with a combination of uncompetitive energy costs, carbon policies and a sustained fall in global demand being the key drivers, risking well paid jobs, national security and supply chain resilience.
The UK chemical industry by numbers
The chemical and pharmaceutical industry is fundamental to modern society. With an immense variety of products, from vital medicines and foods, the construction of buildings, to transport and leisure, the industry truly does have an impact on virtually every aspect of our daily lives.
£0bn
Annual exports
0%
Higher GVA than UK average pay
0%
of total UK business R&D spend
0k+
Directly employed
0
Businesses
0k
Jobs supported in the economy
"The foundation of our economy"
“The UK chemical industry is the foundation of our economy and our national security. The critical raw materials we supply for life sciences, clean energy, defence, water and food security plus many other needs, can be exclusively made in this country. Project 2035 shows how we can do that”.
Martin Ashcroft - Managing Director Tata Chemicals Europe and President of the Chemical Industries Association
“Project 2035 is a massive opportunity for the UK. If we get this right then the UK chemical sector can grow and reclaim its place as the essential supplier to UK and international manufacturing. Government and industry need to move quickly, let’s get on with it.”
Steve Foots, Chief Executive of Croda International
“The Chemical Industries Association report is a stark reminder of what is at risk if we do not act now. The chemicals sector has long been a cornerstone of the UK economy, but without action to ensure a competitive and level playing field, we will lose out to other nations. Collaboration between Government and industry is essential to create an environment that optimises cost to operate, supports investment and delivers solutions needed to achieve Net Zero ambitions.’’
Paul Greenwood, UK Lead Country Manager for ExxonMobil
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Steve foots
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What we need
There is a narrow window of opportunity to shift away from this highly unfavourable outcome towards one which sees industry deliver growth – for itself, for the wider economy and society at large..
To do this, we need:
Delivering National Growth – There is more to do!
Chemical businesses across the UK can enable growth driving priorities to:
- Accelerate UK carbon capture utilisation and storage (CCUS), by providing key technologies to drive decarbonisation across domestic supply chains.
- Facilitate low-carbon hydrogen production, not only as a building block material but to fuel the growing demand from transport, industry and buildings.
- Scale up UK recycling capability through advanced technologies such as chemical to retaining materials and reducing reliance on virgin forms.
- Rebuild UK chemical supply chains for a resilient, low carbon economy as a successful and accelerated energy transition in the UK relies on the chemical industry to deliver in at least six areas, including materials for wind turbines, solar panels, batteries, CCUS, Sustainable Aviation Fuel (SAF), and energy storage.
- Ensure research and innovation leads to UK manufacture since successful scale-up and commercialisation of these innovations in the UK not only enhances competitiveness, jobs and resilience but also enables re-investment into further R&D, creating a virtuous cycle.
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Pathways for a resilient and sustainable future
The chemical industry transition: Pathways for a resilient and sustainable future report is an evidence and scenario-based project informs a 2035 outlook for the UK chemical industry and its future sustainability.
Project 2035 A decade of opportunity?
This brochure helps inform the major threats and opportunities facing UK chemical businesses over the coming 10 years.
A decade of opportunity key messages
Our urgent call for action: A level playing field, alongside a lon-term and predictable growth-enabling policy environment is a must, if the sector is to remain competitive in the UK.
Our urgent call for action
A level laying field, alongside a long-term and predictable gorwth-enabling policy environmental is a must, if the sector is to remain competitive in the UK.
The Chemical Industries Association is the organisation representing and advising chemical and pharmaceutical companies located across the UK. Our core membership is a diverse mix of chemical and pharmaceutical companies operating within the UK
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