The chief executive of BASF, the world’s biggest chemical maker by sales, has warned the European Union that it risks undermining the continent’s industrial competitiveness if it tampers with the emissions trading scheme.
In an interview with the Financial Times, Kurt Bock, who took over as chief executive last year, cautioned that “any artificial [energy] cost increase goes against our global competitiveness”.
A price collapse in the emissions trading system has prompted some member countries to lobby for measures such as limiting the supply of carbon allowances traded, or stiffening the EU’s 2020 target of reducing emissions by 20 per cent from 1990 levels.
Such steps would probably raise the price of the permits that heavy energy users such as chemical companies sometimes have to buy to meet targets on pollutants.
Connie Hedegaard, EU climate commissioner, last week said she would bring forward a review of the trading system, due next year, a move her counterpart in coal-reliant
Mr Bock, said: “We’ve made our peace with the [existing] carbon framework...The discussion that is a little bit frustrating right now is the one about turning the screws on us.
“Suggestions to increase the target from 20 to 30 per cent or to reduce the number of certificates I think at this point in time are unnecessary. It’s breaking a contract that has been made it and it will impair competitiveness,” he added.
As chief executive of one of the continent’s biggest industrial companies Mr Bock’s warning carries weight. Earlier this year he decided to move the company’s genetically-modified crop research headquarters to the
The competitive landscape for European chemical companies is becoming tougher. Mr Bock described shale gas as a potential “game changer for parts of the industry in the
“By changing our portfolio downstream over the past 10 years, acquiring more technology-driven companies, we create barriers to entry through innovation,” Mr Bock said. “That helps shield us to a high degree from this emerging competition based on cheap feedstocks.”
Still, Mr Bock acknowledged that “size does matter in our industry” and the company may continue to make acquisitions. However, BASF does not feel under pressure to do something, he said. “We have a shortlist of companies that are essentially attractive to BASF in terms of strategic fit…If you look at the pattern over the past years, you see that about every other year we made a mid-size acquisition of between €3bn and €5bn,” he said.
BASF completed the €3.1bn acquisition of Cognis, a speciality chemicals maker, in December 2010.
Mr Bock said he remained optimistic about Europe’s economy, which accounts for more than half of the company’s sales: “One should never underestimate old