ACC CEO: US regulations risk chemical industry competitiveness
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The CEO of the American Chemistry Council (ACC), Chris Jahn, has claimed that US regulatory policies are hindering the chemical industry, adding obstacles to the government’s sustainability agenda. Jahn noted that although the industry enjoys many benefits, such as a favorable tax climate and over $1 trillion in stimulus, regulatory overreach and permit issues are impeding progress. Jahn also highlighted that the number of regulations on the chemical industry has approximately doubled over the last 20 years, due to increased regulatory activity in an environment of legislative stagnation.
US Chemical Industry Hindered by Regulatory Policies, ACC CEO Asserts
Regulatory policies in the US are creating hurdles for the chemical industry and obstructing the government’s sustainability agenda, according to the CEO of the American Chemistry Council (ACC). Despite the US chemical industry’s significant advantages like a favorable tax environment, abundant energy, and over $1 trillion in stimulus from the Inflation Reduction Act (IRA), the CHIPS and Science Act (semiconductors) and the Infrastructure Investment and Jobs Act, regulations are impeding progress.
“Government policies are holding us back, particularly with overreaching permits and regulations,” said ACC CEO Chris Jahn. He stressed that his organization is not against regulation, but advocates for “smart regulation”.
Regulatory Activity Skyrockets Amid Congressional Inaction
With Congress being divided and ineffective, there has been an uptick in regulatory activity. In the last two decades, regulations on the chemical industry have approximately doubled. “Congress leaves a void, and regulators fill it,” Jahn noted. Regulatory burdens have escalated across all sectors, from manufacturing and energy to banking.
The costs of final rules implemented under the last three Presidents from Inauguration Day to May 12 in the third year of their first term totals $363.6 billion under Biden, surpassing the $6.0 billion under Trump and $213.3 billion under Obama, according to ACC’s analysis of government data.
13 proposed regulations specific to the US chemical industry, with a projected economic cost of $7 billion annually, are currently under consideration. “This could limit access to vital materials, potentially affecting inflation, economic growth, and our competitiveness with China,” warned Jahn.
Chemistry Creates, America Competes: ACC’s Campaign
The ACC’s “Chemistry Creates, America Competes” campaign aims to educate regulators and lawmakers about the industry’s importance to key government initiatives. “Regulatory bodies are so narrowly focused on specific issues that they overlook the broader real-world impact of their actions,” Jahn emphasized.
The EPA, for instance, is considering restrictions or bans on five chemistries used in automobile and semiconductor manufacturing. This includes a 12-month prioritization process to determine whether vinyl chloride monomer (VCM), acrylonitrile (ACN), aniline, and two other chemicals should be classified as high priority substances, announced in mid-December.
In addition, the EPA proposed to tighten standards for chemical plants producing ethylene oxide (EO), chloroprene, benzene, butadiene (BD), ethylene dichloride (EDC) and VCM in April 2023. EO, a crucial sterilization agent for over 20 billion pieces of medical equipment annually, is among the targeted substances.
“These regulations, once implemented, typically don’t get repealed. They create barriers for small businesses and make it harder for larger firms to operate, stifling innovation essential for addressing global challenges,” Jahn highlighted.
Pushback Against Beyond Petrochemicals
The ACC is challenging Beyond Petrochemicals, funded by former New York City Mayor Michael Bloomberg’s philanthropic foundation. The group aims to block the expansion of more than 120 proposed petrochemical and plastics projects concentrated in Louisiana, Texas, and the Ohio River Valley, and establish stricter rules for existing plants.
“If Bloomberg truly cared about climate change, he would advocate for more US chemical production. We operate more cleanly and efficiently than anywhere else globally. Beyond Petrochemicals also opposes advanced or chemical recycling of plastics,” Jahn argued.
The ACC’s counter-initiative, the “Chemistry Creates, America Competes” campaign launched in September 2023, intends to promote smart regulation partnerships with the administration and the EPA. “We don’t need to ban everything. We can protect the environment and still produce the materials we need in the US,” Jahn concluded.
Cautionary Tale: De-industrialization in the EU
Jahn alluded to the EU’s de-industrialization, attributable to higher energy costs and increasing regulations, as a warning for the US. “They have inflicted this on themselves, driving up their energy costs and reducing chemical production. We need a more thoughtful approach if we want to produce more within our borders rather than in China, and avoid Europe’s fate,” he advised.
No matter the results of the upcoming presidential election, policy risk will persist, Jahn noted. “Even if there’s a change in government, policy challenges will remain. For example, if Trump were to win, the pressure we face in Washington would simply shift to the state level,” he said.
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