Petrochemicals and basic chemical production statistics - NACE Rev. 1.1
From Statistics Explained
- Data from January 2009. Most recent data: Further Eurostat information, Main tables and Database.
This article belongs to a set of statistical articles which analyse the structure, development and characteristics of the various economic activities in the European Union (EU). The present article covers the manufacture of petrochemicals and basic chemicals, corresponding to NACE Rev 1.1 Group 24.1, which is part of the fuel and chemicals production sector. The activities covered in this article are the manufacture of:
- industrial gases;
- primary forms of plastics and synthetic rubber.
Main statistical findings
The manufacture of basic chemicals (NACE Group 24.1) was the principal activity of about 8.5 thousand enterprises across the EU-27 in 2006. These enterprises employed an estimated 562.0 thousand people in 2006, a little over one quarter (27.2 %) of the fuel processing and chemicals workforce. The basic chemicals manufacturing sector generated a turnover of EUR 322.9 billion in 2006, about one fifth (EUR 65.0 billion) of which was left as value added.
The manufacture of other organic basic chemicals (NACE Class 24.14) such as hydrocarbons, organic compounds with nitrogen functions and organo-sulphur compounds generated EUR 28.3 billion of value added in 2006 in the EU-27, accounting for a little more than two fifths (43.5 %) of the value added across basic chemicals manufacturing. The second largest activity within the sector was the manufacture of plastics in primary forms (NACE Class 24.16), the EUR 20.3 billion of value added generated corresponding to a little less than one third (31.2 %) of sectoral value added in 2006. Of the remaining activities, the manufacture of other inorganic basic chemicals (NACE Class 24.13) such as carbonates, metallic halogenates and inorganic acids and compounds generated EUR 5.8 billion of value added and that of industrial gases (NACE Class 24.11) a further EUR 4.2 billion of value added. The combined value added of the manufacture of dyes and pigments (NACE Class 24.12), fertilisers and nitrogen compounds (NACE Class 24.15) and the manufacture of synthetic rubber in primary forms (NACE Class 24.17) accounted for about one tenth (9.8 %) of the value added generated across the EU-27’s basic chemicals manufacturing sector in 2006.
The basic chemicals manufacturing sector in Germany was by far the largest among the Member States, alone generating 29.0 % of the value added generated by this sector across the EU-27. However, Ireland was the Member State by far the most specialised in the manufacture of basic chemicals, the EUR 8.6 billion of value added generated in 2006 contributing 9.4 % of the value added generated across its non-financial business economy, which was a little more than eight times the average contribution among Member States. The only other Member State that showed relatively strong specialisation in this activity in 2006 was Belgium.
The production index for basic chemicals manufacturing in the EU-27 rose continuously during the ten year period through until 2007, at an average 3.3 % per year. Output growth was strongest in the period before 2002, after which it slowed considerably before picking up again in 2005. Growth was particularly strong in Ireland (an average 12.6 % per year), where output almost quadrupled in the period between 1997 and 2003 before falling back to a more sustained level.
There were relatively steady rises in the output of both other organic basic chemicals and industrial gases during the ten years through until 2007 across the EU-27. In contrast, there was relatively little difference in the output levels of fertilisers and nitrogen compounds, nor dyes and pigments in 2007 (when compared with levels in 1997), although there were regular fluctuations in the intervening years. However, a fluctuating but downward trend was observed for the output of synthetic rubber in primary forms, particularly in the period after 2003.
Expenditure and productivity
Tangible investment across the EU-27 in the basic chemicals manufacturing sector was EUR 12.1 billion in 2006, a little over one third (36.3 %) of all tangible investment across fuel processing and chemicals manufacturing. The resulting investment rate was 18.7 %, slightly higher than the non-financial business economy average (18.4 %).
The operating expenditure structure of the basic chemicals manufacturing sector in the EU-27 was similar to the average across the whole of fuel processing and chemicals manufacturing in 2005. Personnel costs accounted for a little more than one tenth (10.5 %) of operating expenditure in the sector in 2006.
The average amount of value added generated by each person employed across the EU-27 in basic chemicals manufacturing was EUR 115.6 thousand in 2006, about a tenth higher than the average (in 2005) across fuel processing and chemicals manufacturing. This relative productivity advantage was maintained, even when adjusting productivity for wages, as average personnel costs in the sector (EUR 55.1 thousand per person employed in 2006) were very similar to the average for the whole of fuel processing and chemicals manufacturing. The wage adjusted labour productivity ratio of the basic chemicals manufacturing sector within the EU-27 was 209.7 % in 2006, which was bolstered by the high ratio (281.0 %) recorded for the other organic basic chemicals subsector (NACE Class 24.14), the largest activity in terms of value added. Of the other activities, the wage adjusted labour productivity ratio (211.9 %) of the industrial gases subsector (NACE Class 24.11) was the only other to equal or surpass the ratio for the sector as a whole. All the other five subsectors at the NACE class level recorded wage adjusted labour productivity ratios in the range of 150 % to 185 %.
Data sources and availability
The main part of the analysis in this article is derived from structural business statistics (SBS), including core, business statistics which are disseminated regularly, as well as information compiled on a multi-yearly basis, and the latest results from development projects.
Other data sources include the PRODCOM statistics on the production of manufactured goods.
Enterprises in the fuel processing and chemicals sector operate within a highly regulated framework that extends from the supply of the raw materials, through their processing to the treatment of waste. The Registration, Evaluation and Authorisation of Chemical substances (the so-called REACH Regulation) came into force on 1 July 2007, with the main aims of improving the protection of human health and the environment from risks posed by chemicals. The first list of 15 chemicals to undergo scrutiny was published by the European Chemicals Agency in October 2008. A new European Parliament and Council Regulation on the classification, labelling and packaging of chemical substances and mixtures (CLP) was adopted in December 2008, in order to align the labelling and description of hazards around the world. The CLP Regulation entered into force on 20 January 2009, with the deadline for substance classification according to the new rules by 1 December 2010 and for mixtures by 1 June 2015.
The fuel processing and chemicals sector faces a number of key challenges; these are energy and raw materials supply, climate change and barriers to market entry in emerging countries. Against this background, the High Level Group on the Competitiveness of the European Chemicals Industry, which was first proposed by the European Commission in June 2007 (COM(2007) 418), released its final strategy report in February 2009. The strategies focus on more innovation and research (see the importance of this in the article called Pharmaceuticals production statistics - NACE Rev. 1.1), the responsible use of resources and a level playing field for sourcing energy and raw materials, and a drive to open world markets.
Petroleum and natural gas are used by petrochemical enterprises to produce a range of products; these concern basic petrochemicals such as aromatics (for example, naphthalene and xlyenes), methanol, and olefins (for example, butadiene and acetylene), intermediate products (for example, ethyl benzene and phenol) and petrochemical products (for example, plastics, solvents, additives and agro-chemicals). Petrochemicals are then used by many other downstream sectors of the economy as a raw material for use in a myriad of products (for example, healthcare products, plastics packaging and synthetic rubber tyres).
The sector is touched by legislation at various levels, with environmental protection and health and safety prominent. The REACH and CLP legislations mentioned in the article on Fuel processing and chemicals production statistics concern forms of classifying, packaging and labelling chemicals. Other new legislation has looked at implications of the global chemicals trade. For example, the European Parliament and the Council adopted Legislation on the export and import of dangerous chemicals in June 2008, thereby implementing the Rotterdam Convention on the Prior Informed Consent Procedure (PIC) with a number of further provisions. The focus of this legislation is to protect human health and the environment from potential harm. As such, it complemented the 2007 Community Implementation Plan for the Stockholm Convention on Persistent Organic Pollutants (POPs), which dealt with assessing measures to tackle the accumulation of adverse chemical substances in various ecosystems, across international boundaries. Civil protection legislation was also developed further in 2007, in part looking at the impact of potential chemical accidents and responses to that; Council Decisions on the civil protection mechanism (Decision (2007) 779) set the framework for a co-ordinated response by Member States and the Community in the event of major emergencies.
Further Eurostat information
- Decision 2007/418 of 14 June 2007 setting up the High Level Group on the Competitiveness of the Chemicals Industry in the European Union
- Decision 2007/779,Euratom of 8 November 2007 establishing a Community Civil Protection Mechanism
- Regulation 162/2007 of 19 February 2007 amending Regulation 2003/2003 relating to fertilisers for the purposes of adapting Annexes I and IV thereto to technical progress
- Regulation 689/2008 of 17 June 2008 concerning the export and import of dangerous chemicals
- Regulation 1272/2008 of 16 December 2008 on classification, labelling and packaging of substances and mixtures, amending and repealing Directives 67/548 and 1999/45, and amending Regulation 1907/2006
- Data for the Netherlands are unavailable for 2005 and 2006, although figures for earlier years also point to a similar level of specialisation in this activity as in Belgium.
- SEC(2007) 341.