Who will finance the chemical sector’s modernisation?
The European chemical sector faces two linked challenges: the need to move away from fossil fuels – both as an energy source and as raw material input – and growing pressure from competitors abroad. Both point the same way: toward significant investment in modernising how chemicals are sourced and produced.
Those investments can be categorised into:
• Public funding instruments include grants, research programmes, guarantees and state aid frameworks. These can help de-risk specific projects, catalyse investment, support innovation and enable shared infrastructure.
• Private finance channels include cash generated from companies’ operations, finance from banks, and finance raised from investors through capital markets. These channels provide the bulk of industrial finance, especially for capital expenditure in long-term assets such as production plants, equipment and infrastructure.
This paper sets out the roles and relative scale of public funding and private finance, and illustrates how industrial investment is financed in practice through examples from companies active in the European chemical sector. The central question is not only how much investment flows to the sector, but what it builds: the same private finance flows can prolong high-emission, fossil-based assets, or help finance the transition to low-carbon technologies, non-fossil feedstocks and the infrastructure needed for a competitive European chemical sector.
Download the document
