TiO₂: “The anti-dumping measures also risk undermining the EU’s environmental objectives”
Nicolas Dujardin, Chief Operating Officer at paint producer Océinde, is concerned about the anti-dumping duties on titanium dioxide from China that recently came into force. In his view, the European Commission’s measure has a significant impact on the local paint and coatings industry. And these are to be assessed rather negatively. In his assessment of the measures, he addresses the risks for the European paints and coatings industry. His comments are in line with the assessment of the situation by Paula Salastie, CEO of Teknos (read the interview with Paula Salastie) and not with the positive analysis of the measures by Reg Adams of Artikol (read the interview with Reg Adams). However, Dujardin also articulates his solutions, which he believes would be more effective.
Part 1: Addressing the risks
The first part points out the challenges and risks that come with recently implemented anti-dumping duties.
Impact on Costs and Competitiveness of European Businesses
The anti-dumping duties imposed by the European Commission, which could reach up to 39.7%, will result in a substantial increase in the cost of TiO₂ imported from China—a key ingredient in industries such as paint, plastics, and cosmetics. The price of TiO₂, which is currently about 10% cheaper when sourced from China compared to European-produced TiO₂, could rise from EUR 2.50 to EUR 3.50 per kilogram. This cost increase directly impacts the profit margins of European companies, particularly SMEs, where TiO₂ can represent up to 30% of production costs. Such an increase could force these businesses into bankruptcy or push them to relocate production outside the EU.
Supply Chain Risks and Increased Costs
Europe is currently facing a production deficit of about 250,000 tonnes of TiO₂ per year, lacking the capacity to quickly replace Chinese imports. This shortage could lead to supply chain disruptions, forcing companies to turn to more expensive or less reliable sources, further driving up production costs and threatening business continuity.
Consequences for Employment and Innovation
The paint and coatings sector, representing 5-6 % of the European chemical industry and employing approximately 110,000 people, is particularly vulnerable. With rising costs and shrinking profitability, many companies could be forced to shut down, leading to significant job losses and weakening the European industrial ecosystem. This situation is likely to discourage investments in innovation, slowing the development of sustainable solutions, which contradicts the EU’s Green Deal objectives.
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Conflict with EU Environmental Goals
The anti-dumping measures also risk undermining the EU’s environmental objectives. If European companies are forced to import finished products containing TiO₂ instead of raw materials, this will significantly increase CO2 emissions due to the greater transportation involved. This outcome directly contradicts the EU’s commitment to reducing emissions and could damage the credibility of European climate policy.
Disproportionate Measures Benefiting a Few Large Players
Finally, it is essential to point out that the current price difference between Chinese and European TiO₂ is only about 10%, far below the 39.7 % duty imposed by the European Commission. This raises the question of whether this measure is genuinely about fair competition or if it serves to protect the profit margins of a few large, predominantly American-owned, producers established in Europe. Such a policy could end up weakening a much larger and more critical industrial fabric of SMEs and mid-sized companies that are far more important for local jobs and the European economy.
Long-term Strategic Risks for EU Industry
An additional concern is the potential long-term damage to the EU’s strategic autonomy in critical industries. By imposing such high duties, the EU risks becoming more dependent on external sources for finished products, as European manufacturers may struggle to compete or maintain operations domestically due to increased costs. This could undermine the EU’s broader strategic goals of enhancing industrial resilience and self-sufficiency, ultimately weakening its industrial strategy and goals for a sustainable and competitive future.
In conclusion, while the intention behind these anti-dumping measures might be to protect European TiO₂ producers, the potential consequences for the broader European industry are deeply concerning. A more measured approach that considers the impact on SMEs and the overall competitiveness of European industries is necessary to avoid severe economic repercussions.
Without speaking about increase price mandatory, due to this tax, for the final customer…
Part 2: Addressing solutions
In the second part, Dujardin describes solutions that he believes would be more effective and minimise the risks for European paint manufacturers.
Gradual Implementation of Duties:
Instead of imposing an immediate 39.7 % duty, the EU could introduce tariffs gradually over several years. This phased approach would allow companies time to adjust their pricing structures, find alternative suppliers, or invest in local production without causing sudden financial strain.
Adjustment Support:
Provide financial assistance or tax incentives to companies in the industry to help them manage the transition. This could include grants for research into alternative raw materials or subsidies to offset increased costs temporarily.
Investing in European TiO₂ production:
The EU could encourage investment in local TiO₂ production facilities through subsidies, low-interest loans, or public-private partnerships. This would reduce dependency on imports, increase self-sufficiency, and stabilize supply chains. This has to be a European manufacturer and actually there are only foreign country companies…
Innovation Grants:
Promote research and development into more efficient and environmentally friendly production methods for TiO₂, ensuring European producers can compete on cost and quality with their international counterparts.
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Diversification of Supply Chains:
Encourage the industry to diversify its supply chains by sourcing TiO₂ from multiple regions, not just China. This could involve forming trade agreements with other countries or regions that produce TiO₂ at competitive prices.
Collaboration: Create platforms for knowledge sharing and collaboration between European producers, importers, and manufacturers to optimize supply chain efficiency and reduce costs.
Encourage joint ventures or partnerships between European and non-European companies to share technology, reduce production costs, and improve competitiveness on a global scale.
Consumer Price Stabilization Measures with Price Monitoring:
Implement a price monitoring mechanism to prevent excessive price increases from being passed on to consumers. This could involve temporary price caps or government subsidies during the adjustment period.
Consumer Awareness Campaigns:
Educate consumers about the importance of supporting European-made products, potentially justifying slight price increases while highlighting the benefits of local production in terms of quality, environmental impact, and job creation.
By implementing these measures, the EU can create a more resilient and competitive paints and coatings industry that benefits all stakeholders:
- For TiO₂ producers: Increased investment in local production and innovation will ensure they remain competitive globally while reducing dependency on imports.
- For TiO₂ users: Phased duties and financial support will allow companies to adapt without facing immediate financial hardship.
- For Consumers: Stabilised prices and the promotion of European-made products will ensure continued access to high-quality paints and coatings without excessive cost increases.
- For the Environment: Encouraging local production and innovation aligns with the EU’s Green Deal objectives, promoting sustainable industrial practices and reducing carbon footprints.
Overall, a balanced approach that combines gradual implementation of duties, investment in local production, and strategic collaboration will ensure the European paints and coatings industry remains robust and competitive, benefiting producers, consumers, and the broader economy.
More about TiO2
Paula Salastie, CEO of Teknos, expresses concern over the proposed anti-dumping duties on titanium dioxide from China, warning of significant risks to the competitiveness and sustainability of the European paint and coatings industry. Here you can read the full interview.
Reg Adams, titanium dioxide expert and managing director of Artikol, discusses the impact of the EU’s anti-dumping duties on Chinese TiO₂ for the paint and coatings industry. Read Adams’ views here.
