Brussels: The EU plans to provide various support to reduce production costs and increase the competitiveness of the chemical industry in the bloc, according to a statement Tuesday from the EU Commission. The Commission presented an action plan for the chemicals industry to strengthen the competitiveness and modernization of the EU chemical sector.

According to Anadolu Agency, the action plan aims to tackle key challenges such as high energy costs, unfair global competition, and weak demand while promoting investment in innovation and sustainability. The EU Commission will establish the "Critical Chemical Alliance" with member states and stakeholders to address risks in the sector, as outlined in the plan.

The alliance's role will include identifying critical production sites in need of support and developing solutions to commercial challenges like supply chain dependencies. The EU Commission also plans to implement trade defense measures to ensure fair competition in the chemicals sector, with a focus on strictly monitoring chemical imports.

"The Alliance will align investment priorities, coordinate EU and national projects, including Important Projects of Common European Interest (IPCEIs), and support EU critical production sites to boost innovation and regional growth," the plan noted. Measures will be taken to help reduce high energy and feedstock costs, including introducing clear rules for low-carbon hydrogen and updating state aid to lower electricity costs for more chemical producers by the end of the year.

Chemical producers are set to benefit from public subsidies aimed at reducing electricity costs. Additionally, financial incentives and tax measures will be offered to boost demand for clean chemicals. The EU Commission estimates these measures could save the chemicals industry at least £363 million ($425.1 million) annually.