Nicolas Dujardin
Océinde
Last 11 July, the EU began imposing anti-dumping duties on imports of TiO2 manufactured in China, with the enactment of Regulation 2024/1923. These are described as ‘provisional measures’, valid for six months.
It is crucial for the paints and coatings industry to highlight the significant economic and industrial repercussions these measures could have on European businesses, particularly in terms of competitiveness, employment, and environmental goals.
The provisional measures apply to TiO2 in all forms, whether as uncoated oxide or as a pigment, whether anatase-type or rutile-type and whether produced via a sulfate-route or a chloride-route process. The duty is applied at a percentage rate based on the import price, CIF EU border, prior to normal customs duty (currently 6.5%).
The anti-dumping rate is 39.7% for the world’s largest TiO2 producer, but only 14.4 % for its affiliates. It is 35% for 23 other named companies which cooperated with the EU investigators. It is 39.7% for all other Chinese suppliers, so unusual features of this anti-dumping case.
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 € 2.50 to € 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.
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.
