Impact of Rising Regulations on Chemical Manufacturing & American Priorities

ACC Member Survey

The Impact of Rising Regulations on Chemical Manufacturing & American Priorities report provides valuable insight into the impact of the tremendous rise in chemical regulations and how they adversely impact national priorities and American manufacturing. The findings are the result of a survey of ACC member companies doing business in the U.S.

Chris Jahn, President & CEO | American Chemistry Council
U.S. chemical manufacturers continue to face challenges from persistent inflation, competition overseas, and a dramatic increase in regulations at home. Unless policymakers take a different approach to how they develop and apply regulations, critical chemistries will suffer along with the important products supported by chemistry.

Impact of Rising Regulations on Chemical Manufacturing and American Priorities

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Chemistry Contributes to Supporting National Priorities

Clean Energy

72%

of chemical manufacturers report producing a chemical input used in clean energy.

They produce chemicals and synthetic materials used in batteries, hydrogen fuel cells and electrolyzers, wind turbines, solar panels, and carbon capture and sequestration.

Health Care

62%

of chemical manufacturers report producing a chemical input used in health care.

They produce chemicals and synthetic materials used in lifesaving pharmaceuticals and vaccines, medical devices, and implants. They also produce chemistries used in high-purity air cleaning and biocides to improve patient safety.

Infrastructure

62%

of chemical manufacturers report producing a chemical input used in infrastructure.

They produce chemicals and synthetic materials used in road construction, large infrastructure projects (i.e., bridges, dams), water treatment and distribution, energy-efficient buildings, and EV charging stations.

Semiconductors

52%

of chemical manufacturers report producing a chemical input used in making semiconductors.

They produce chemicals, gases, and synthetic materials used in the production of semiconductors used throughout the modern economy. Advanced manufacturing of semiconductors includes multiple steps that require chemistry, including the creation of silicon crystals, wafer cutting, and polishing, and chemicals to etch complex circuitry.

Biotechnology/Biomanufacturing Products

34%

of chemical manufacturers report producing a chemical input used in making biotechnology/biomanufacturing products.

They produce chemicals and synthetic materials used in vaccines, bio-based materials used across the economy, seed, crop protection, crop nutrition, and animal feed products for the farm sector.

Chemical manufacturers also contribute important products to support National Defense and Transportation.

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Growing Regulatory Burden

Most chemical manufacturers report that overall regulatory burden has increased across all levels of government. And they expect the number of regulations to continue to increase over the next year.

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Impact of Regulations on National Priorities

Many of the chemical manufacturers that produce chemical inputs to products/industries prioritized by the Administration reported that the current and/or forthcoming regulatory burden negatively impacts their ability to competitively produce the chemical input(s) in the U.S. Across chemical manufacturers participating in the survey, this was found to be the case for:

Impact of Regulations on Manufacturing

Over the past year, about 2/3 of chemical manufacturers reported having been adversely affected due to government delay in making a regulatory decision and/or taking a regulatory action on a permit, license, or product approval in the United States.

Companies said new regulatory policies:

43% Impacted ability to obtain permits
12% Led company not to expand U.S. operations
9% Led company to move operations out of the U.S.

Asked to consider a scenario where existing regulatory compliance costs were suddenly and permanently increased significantly, manufacturers report they would:

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Regulatory Challenges and Issues

Chemical manufacturers reported that the most challenging regulations to comply with are due to:

And companies mentioned other reasons, including decision timelines that are inconsistent or delayed; slow responses to regulatory permits; new substance PMN is expensive and takes too long to approve; regulations and reporting burdens that do not reflect the risk to human health and the environment; and regulations based on improper or inadequate science.

Big Return on Fixing Regulations

Asked to consider a scenario where existing regulatory compliance costs were suddenly and permanently reduced significantly, chemical manufacturers said saved resources would be diverted towards:

Investment in R&D, new technologies, and new products
Capital replacement (operational efficiency)
Increased hiring, expanding operations / capacity, sustainability initiatives

Methodology

In September of 2023, the American Chemistry Council (ACC) conducted a survey of member companies doing business in the U.S. to better understand how they are being impacted by regulations. 58 companies participated in the survey. 38% of the companies surveyed are “small businesses” employing 550 or less full-time equivalents (FTEs).

Every effort has been made in the preparation of this publication to provide the best available information. However, neither the American Chemistry Council, nor any of its employees, agents, or other assigns, makes any warranty, expressed or implied, or assumes any liability or responsibility for any use, or the results of such use, of any information or data disclosed in this material.

This report was prepared by ACC’s Economics and Statistics Department.

Questions about the survey and findings may be directed to:

Emily Sanchez | Director, Economics & Data Analytics

Impact of Rising Regulations on Chemical Manufacturing and American Priorities