Trends 2026: Assessing Chemical Sustainability in EU

With the recent Omnibus bringing significant changes to the European Union (EU) Green Deal, chemical companies are assessing their sustainability reporting obligations in 2026.

However, before companies know how to prepare for what's ahead, it's important to understand the position from which they're starting.

The recent article Sustainable Practices in the Chemical Industry: Insights from EU Taxonomy Reporting looked at publicly listed companies in the EU chemical sector to better understand how those companies support sustainability in accordance with the EU Taxonomy Regulation.

3E spoke with the article's author, Andreea Danila, to discuss her research and to look at ways chemical companies could better implement their sustainability strategies in 2026. Danila is an IT specialist with a PhD in economics who explored the intersection of green initiatives and climate policies with a focus on the EU Taxonomy and the Inclusive Wealth Index.

Misalignment With EU Taxonomy

The EU Taxonomy provides a common classification system for sustainable activities, allowing companies to demonstrate and promote their alignment against a shared set of sustainability criteria. For an activity to be considered eligible, it must contribute to at least one of six environmental objectives: climate change mitigation, climate change adaptation, protection of water and marine resources, transition to the circular economy, prevention and management of pollution, and the restoration of biodiversity.

Eligible activities are not necessarily aligned with the taxonomy, as they may still undermine sustainability outcomes. To be classified as aligned, activities must meet the Technical Screening Criteria, do no significant harm to other environmental objectives, and comply with the taxonomy's minimum social safeguards. Sustainability reporting therefore requires a breakdown of activities that are aligned, non-aligned, eligible, and non-eligible.

Danila's research looked at 26 of the largest companies operating in the EU chemical sector and determined that sustainability represented a small portion of their economic activities, including turnover and capital expenditures (CAPEX). Only 25% of CAPEX activities were found to be eligible, with 87% of activities related to turnover also being non-eligible. Aligned activities account for only 3.89% of reported turnover, while non-aligned activities represent a far larger share of 9% of total turnover.

Danila said that although the industry has started the transformation process for supporting sustainability, there is clearly a long way to go.

“Although the majority of the analyzed companies declare and state on their websites that they are committed to decreasing emissions, focusing on the circular economy, and empowering local communities with new skills, the findings of this research tell us otherwise,” Danila wrote in the article. “It seems there is a significant gap between these declarations and the actual activities performed.”

Sustainability Challenges in Chemical Industry

Chemical companies face the challenge of lowering their environmental footprint and maintaining their competitive edge while navigating significant challenges related to the complexities of the industry and the strict regulatory environment.

According to Danila, chemical companies are some of the most difficult industries to transform into more sustainable operations because of their extensive processes, complex supply networks, and established operating models. Even when companies are dedicated to furthering their sustainability efforts, complex networks and dependencies mean that single products can generate several byproducts and additional raw materials, and altering one element of those processes can create disruption across the entire end-to-end process, including along the global supply chain.

These challenges are compounded by the long operating lifespans of chemical facilities, which makes operational change and digital transformation difficult. Data governance is another major constraint, affecting everything from strategy to sales. Danila said that strong data governance and data quality are essential to achieving sustainability goals in the chemical industry, yet many companies struggle to put the necessary structures in place.

“It's really important for companies to establish robust data governance in order to track all the processes that generate data and all the systems through which the data flows,” said Danila. “Management relies on this data to take decisions, yet in many cases the data is not fully accurate.”

Danila said these data challenges are often due not to individual shortcomings, but instead stem from structural gaps in the process design, insufficiently defined procedures in early implementation stages, and a lack of validation controls that prevent inconsistencies from being identified and corrected early. As companies set sustainability targets for 2030 or 2040, achieving those goals ultimately depends on the availability of accurate, consistent, and well-governed data, yet many chemical companies remain behind on data governance, and closing those gaps can take years even when there is genuine commitment to sustainability.

“You need decision-makers who are able to acknowledge that there are structural deficiencies and will commit to addressing them,” said Danila. “It might take several years to analyze and understand where the problems are, consolidate fragmented data sources, and implement coherent data governance frameworks.” Given such time horizons, companies must also remain adaptable, as business conditions evolve and resistance to change remains a significant challenge to tackle inside large organizations.”

Danila said that communications can be difficult in large chemical companies, and that even in the age of advanced technology like artificial intelligence (AI), human oversight and understanding remain critical components of transformational strategies.

“In many cases, no single individual has end-to-end visibility over business and data processes, a clear understanding of how these processes should function, and where accountability lies when issues need to be fixed,” she said. “What is needed is an experienced and well-trained professional with a comprehensive view of all operations and processes and who is able to understand what data governance implies.”

However, such a role cannot operate in isolation. Danila noted that effective data governance requires close and continuous collaboration across business functions, including operations, IT, finance, and sustainability to ensure not only that processes are consistently applied and improved but also that data remains aligned across systems.

According to Danila, greenwashing accusations against chemical companies are often attributable not to malice but to an evolving understanding of the complex challenges involved in changing the business to support sustainability.

“I think once companies start looking into the sustainability requirements, there is often an initial realization of the scale of implementation required, which is challenging in a complex system, especially if you operate in different countries or continents,” said Danila. “There is definitely a willingness to achieve those sustainability targets, but the early stages are often characterized by a steep and sometimes chaotic learning curve. However, with a clearly defined and strategically phased implementation plan, the objectives could remain achievable.”

Achieving Sustainability Success in 2026

Danila believes that for chemical organizations to succeed with sustainability in 2026, it will be critical to have alignment between all stakeholders, including the public sector, the private sector, consumers, and even competitors.

“Companies need to look beyond their own boundaries and understand how customers, suppliers, and peers are approaching sustainability,” said Danila. “Through alignment and shared objectives, systemic progress can be achieved. No single company can achieve this transformation in isolation. On the opposite side, it requires ongoing dialogue, coordination, and development of common approaches. This is less likely to happen within 2–3 years, but over a longer time horizon of 5–6 years.”

In her article, Danila said that partnerships between the public and private sectors could promote innovation and share risks related to large-scale sustainability initiatives, and that public policy initiatives could focus on providing grants or interest-free loans to companies that want to embrace sustainability and reduce their environmental footprint.

“I think companies have an incentive to change when there is a push from the market and customers expect to share sustainability related data,” said Danila. “Even if their data systems are not fully ready, waiting on the sidelines can put competitiveness and market share at risk.”

Danila added that companies can begin assessing their sustainability potential even if their data systems are not fully ready, improving data quality over time rather than waiting for perfect conditions or tools.

Danila said that chemical companies are aware that they need to make more progress with sustainability, especially in light of the negative perception of the industry in the eyes of sustainability advocates.

“I think there is a growing awareness, reinforced by public scrutiny and regulatory pressures,” said Danila. “Companies know they need to better measure their impact on biodiversity and take a more active role in the circular economy. Some companies that started the transition 10 years ago are already well advanced, which shows there is a real willingness within the industry to move forward.”

Danila said that while recent regulatory developments in the EU don't have an impact on her findings - since the large companies she studied in her article will remain subject to reporting obligations - some companies might still find the requirements of the taxonomy restrictive or difficult.

One possible solution is for companies to begin measuring their real impact on the environment and using the results to set up realistic objectives that are in line with their capacity for implementation. As such, data management and governance will play a critical role in supporting sustainability efforts, especially for multinational companies that have complex data architectures, which can make it difficult to have the highest quality data that is required for decision-making.

This series of Trends 2026 articles examines how the convergence of manufacturing transformation, market volatility, and product stewardship evolution with chemical risk management and compliance have created major opportunities and challenges for companies in the chemical sector in 2026 and beyond.