The chemical industry: sovereignty is at stake

In the absence of a coherent industrial strategy, many advanced economies have allowed their productive systems to become dependent on imported molecules, processes, and materials. This dependence extends beyond hydrocarbons to the chemical intermediates that underpin modern industry.

Recent geopolitical tensions have underscored the fragility of this model. Critical chemical precursors—ammonia, methanol, ethylene, solvents, and refined rare earth elements—move through strategic maritime corridors such as the Gulf, the Red Sea, and the Strait of Malacca, routes on which a substantial share of global production relies. Any disruption to these flows threatens not merely a single industry, but the functioning of entire industrial value chains.

The chemical industry should be seen as a strategic industrial foundation that underpins many other sectors. Without it there can be no pharmaceuticals, batteries, electronics, modern agriculture, or defense systems. Healthcare, clean energy, semiconductors, and artificial intelligence all require reliable access to chemical and metallurgical inputs essential for any durable industrial strategy.

At the same time, the global infrastructure for these inputs is being rapidly reshaped. China has made chemistry, critical-metal refining, and advanced materials core pillars of its industrial power. The United States is rebuilding its industrial base by leveraging an energy advantage from shale gas and through a combination of industrial policy, tax incentives, subsidies, trade protection, infrastructure spending, and supply-chain security measures to support reindustrialization in chemicals and adjacent manufacturing sectors. India, the Gulf states, and several Southeast Asian economies are likewise moving steadily up the value chain.

While others are strategically organizing the interdependencies of the future, many Western countries are only beginning to confront their growing molecular and mineral vulnerabilities. These dependencies no longer relate solely to raw materials, but increasingly to processed molecules, catalysts, solvents, active battery materials, and refined rare earth elements. When domestic supply becomes structurally uncompetitive, the consequences emerge rapidly: underutilized industrial capacity, delayed investments, erosion of expertise, industrial units shutdowns and enduring technological dependence.

The health crisis had already exposed these vulnerabilities through shortages of critical active pharmaceutical ingredients. Today, the energy transition is revealing similar fragilities across batteries, permanent magnets, semiconductors, and low-carbon fertilizers.

Regaining strategic capabilities

Strategic autonomy does not mean producing everything domestically. It means preserving the capabilities without which a nation or region no longer truly has freedom of choice. An economy is defined not only by what it consumes, but by what it controls: industrial processes, critical materials, energy systems, recycling capacities, and technological know-how.

When a chemical or metallurgical sector weakens, the loss goes far beyond production volumes. What disappears is the ability to innovate, reindustrialize, defend strategic interests, maintain a high level of expertise and decarbonize independently rather than according to the industrial decisions of others.

The challenge is therefore simultaneously industrial, technological, energy-related, and geopolitical. The first step is to identify the families of critical molecules and materials whose absence would paralyze entire value chains: low-carbon ammonia, strategic solvents, electrolytes, refined rare earths, lithium, nickel, synthetic graphite, advanced fluorinated compounds, and high-performance engineering polymers.

The second imperative is to finance, at scale, the transition to decarbonized and defossilized chemistry. A new generation of companies is already developing breakthrough processes capable of producing essential molecules without petroleum, or with dramatically lower emissions. These include synthetic fuels derived from hydrogen and recycled CO₂, bio-based plastics, e-methanol, green ammonia, fermentation- and electrochemistry-based solvents, and advanced chemical recycling for complex plastics. These companies need support from financial and strategic investors, especially to bridge the difficult transition from completed R&D to industrial-scale deployment.

Industrial sovereignty also depends on the recovery and recycling of critical metals. Used batteries, electronic waste, permanent magnets, industrial catalysts, and photovoltaic panels are emerging as strategic reservoirs of raw materials. New companies are developing hydrometallurgical, biological, and electrochemical processes capable of recovering lithium, cobalt, nickel, and rare earth elements with increasing efficiency. This “urban mine” has become a decisive strategic frontier: reducing dependence on imported minerals, securing supplies for energy-transition industries, and lowering the environmental footprint of industrial value chains.

Across the world, startups and industrial leaders are working to rebuild technological sovereignty through clean chemistry. Some are developing electrified chemical platforms powered by renewable energy; others are replacing fossil feedstocks with captured carbon, agricultural residues, or waste biomass. This is no longer experimental research — it is becoming one of the defining industrial transformations of our time.

At CDI Global, we advise startups at the forefront of this transition. These include companies developing innovative processes to produce ethylene, the world’s highest-volume organic chemical and a foundational building block for countless materials and industrial applications, from CO₂ generated through sources such as the methanization of organic waste rather than through the steam cracking of fossil hydrocarbons. We also support a startup developing a clean, cost-competitive leaching technology capable of extracting rare metals from recycled batteries and industrial waste streams without effluent emissions. To improve the likelihood of funding, our Global Chemical Industry Group also works with investors focused on specialized domains such as metal recovery and carbon-free raw materials, who are naturally more inclined to support technologies aligned with their investment strategy.

By: Thierry Gibert and Xavier Houzard