EU chemicals alliance faces criticism over industry influence and deregulation
The EU Critical Chemicals Alliance is facing criticism from environmental organizations after a new report alleged the body prioritizes industry interests over environmental protection in shaping the European Union’s chemicals policy. The report, published on July 6 by Corporate Europe Observatory and the European Environmental Bureau, claims the alliance has become a platform for deregulation and increased public support for major chemical producers.
Established in January 2026 with backing from the European Commission, the alliance was created to identify strategically important chemicals and production sites that could qualify for future state aid. According to the report, the European Chemical Industry Council (CEFIC) exercises significant influence over the initiative, with its representatives serving as vice chair of the working group responsible for defining critical molecules and production sites, and as chair of its trade working group. The watchdogs argue that environmental organizations have been largely excluded from the decision-making process, describing the governance structure as an example of “structural corporate capture.”
The report identifies benzene, chlorine, ethylene, propylene and hydrofluoric acid among the “critical molecules” recommended for potential public investment. It also argues that leading European chemical producers generated hundreds of billions of euros in profits over the past decade, directing substantial returns to shareholders while continuing to benefit from free carbon allowances under the EU Emissions Trading System.
The findings have implications for the fertilizer industry, whose producers are among the largest recipients of free emissions allowances under the EU ETS. The sector is also navigating the proposed simplification of EU chemical regulations and the implementation of the Carbon Border Adjustment Mechanism. Environmental groups argue that recent efforts by the European Parliament and the Council of the European Union to ease chemical regulations risk weakening environmental protections in favor of industrial competitiveness. According to Euronews, neither the European Commission nor CEFIC responded to requests for comment.
Source: Euronews
What to know about the EU Critical Chemicals Alliance
It is an EU body launched in January 2026 with European Commission endorsement to identify chemical substances and production sites deemed critical to the European economy, potentially unlocking public support and state aid. Members include BASF, TotalEnergies and Avantium.
The Corporate Europe Observatory and European Environmental Bureau report, published July 6, alleges the process amounts to structural corporate capture. It says CEFIC holds key leadership roles, including vice-chair of the group defining critical molecules and chair of the trade working group, while environmental groups are largely shut out.
According to the report, the molecules flagged for public investment include the carcinogen benzene, chlorine, the petrochemical feedstocks ethylene and propylene, and hydrofluoric acid, which is linked to PFAS “forever chemicals.”
Nitrogen and ammonia producers are among the largest recipients of free ETS carbon allowances and are exposed to the same EU chemical-deregulation drive and carbon border rules. Decisions on state aid, pollution standards and free allowances therefore feed directly into fertilizer producers’ cost base and competitiveness.
The European Parliament and Council have voted to simplify chemical regulations, a move green groups oppose. The report’s authors want public funding made conditional on reducing hazardous chemicals and on a test of which substances are socially essential. The Commission and CEFIC did not respond to Euronews.
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