Latin America. The resin market is at an inflection point. Faced with challenges such as rising raw material prices, high decarbonisation and sustainability costs, the impact of tariffs and trade barriers and volatile European demand, the sector is making steady progress towards a more sustainable, digitalised and innovative model, with a commitment to adaptability and collaboration as axes to take advantage of emerging opportunities.
by Andrea Ochoa Restrepo
Despite this complex context, the medium and long-term horizon is perceived with optimism. According to Altakem estimates, "the compound annual growth rate (CAGR) of the sector over the next decade (2024–2034) could reach 5% in value. This projection reflects a resilient market, which has understood that sustainability is not only an ethical commitment, but also a competitive advantage.
An increasingly complex trading environment: the tariff factor
One of the factors that is most conditioning the competitiveness of European resin manufacturers is the growing weight of tariffs and protectionist measures. In a globalised market, where costs are already under upward pressure from commodity and energy inflation, the establishment or increase of tariffs on key products – such as resins, monomers or precursor chemicals – is an additional drag on European industry, especially when competing with regions where environmental and social standards are more lax.
For many distributors and manufacturers, this situation translates into lower margins, greater uncertainty and the risk of relocation of certain productions. In addition, it directly affects investment decisions in innovation and sustainability, as the volatility of the commercial context limits the ability to plan for the long term.
"Tariffs should be aligned with environmental criteria and competitive fairness," Altakem says. Today, the cost of regulatory compliance in Europe is very high, and if the industry is not adequately protected, which is committed to sustainability, there is a risk of favouring operators that are less responsible from an environmental and social point of view". The need for a trade regulatory framework consistent with the goals of the European Green Deal is a constant demand from the sector.
Latin America: Between Industrial Opportunities and Tariff Challenges
In Latin America, the impact of tariffs on the resin market presents a diverse and complex reality, marked by three main factors: dependence on imported raw materials, regulatory asymmetry with respect to developed regions, and changing tariff schemes that affect both the import of inputs and the export of finished products.
In many countries in the region, resins and their precursor chemicals are highly sensitive goods, with tariff levels ranging from 5% to 15%, depending on the country and the type of product. While some governments have promoted special regimes to encourage the local processing industry (such as free zones, preferential tariffs, or incentives for the temporary importation of inputs), these measures often lack continuity or are subject to political uncertainty.
In addition, the region faces a double challenge: on the one hand, the pressure to move forward with more sustainable processes, aligning with international standards (for example, traceability or recycled content requirements in exports to Europe); on the other, the need to maintain its industrial competitiveness, in markets where the cost component continues to be decisive.
"Latin American industry needs more strategic and stable tariff policies that promote innovation, the attraction of sustainable investments and the regional integration of value chains," say sources in the sector. In this context, greater coordination between trade blocs (such as Mercosur, the Pacific Alliance or agreements with the EU) could contribute to improving the predictability and efficiency of the resin trade in the region.
There is also a growing risk: the application of non-tariff barriers by developed countries (such as the European CBAM) could imply new costs or requirements for Latin American exporters, especially if carbon footprint measurement systems and internationally recognized certifications are not developed.
Decarbonization and sustainability: a shared challenge
The European Union's sustainability plans are setting the tone for global transformation. Many companies have defined their own carbon footprint reduction targets, aligning with the climate goals of the European Green Deal. Investment in cleaner processes and safer products is advancing, but these transformations entail additional costs that must compete with imported products without those same requirements.
For this reason, many voices in the sector are calling for tariff measures to also serve as a climate adjustment mechanism at the border, as proposed by the CBAM (Carbon Border Adjustment Mechanism). These types of tools could level the international playing field, making products that do not meet similar environmental standards also face a cost proportional to the impact they generate.
For Latin America, this scenario represents an opportunity and a warning. Those who manage to align their production processes with international sustainability criteria will be able to access demanding markets and generate added value, but it will be key that trade policies, tax incentives and tariff schemes accompany this transition with a long-term vision.
