Over 1,300 European industry organizations warn: High energy costs in the EU "stifle competitiveness"

More than 1,300 European industry organizations called on the European Commission this week to lower energy prices and carbon emission costs in order to save the overall competitiveness of the EU. This appeal was made as Belgium hosted a two-day high-level conference focused on revitalizing European industry.

The statement read: “Reduce energy and carbon costs. Europe’s energy costs are so high that participation in global competition is difficult, and rising costs are not only due to commodity prices themselves but also related to various regulatory charges.”

Several media outlets quoted industry executives saying they hope electricity prices can return to pre-2021 levels—around 44 euros per megawatt-hour (approximately $52)—compared to the current range of 80 to 100 euros per megawatt-hour.

European Commission President Ursula von der Leyen stated at the European Industry Summit on Wednesday that the EU “has favorable conditions to reduce costs,” mentioning planned measures including improving grid infrastructure and expanding offshore wind projects.

Belgian Prime Minister Alexander De Croo mentioned that Belgium, France, Germany, and the Netherlands are facing a “survival crisis” due to factory closures and declining investments, which are caused by high energy costs and regulatory burdens.

Later this month, the European Commission will release the Industrial Act, which is expected to set European content targets for a series of strategic products including solar panels and electric vehicles.

However, industry sources pointed out that grid modernization takes time. The statement emphasized that relevant changes should “start today.”

“The chemical industry no longer has ten years to wait,” said Peter Huntsman, CEO of Huntsman Chemical.

Since the EU imposed sanctions on Russia, a major energy supplier, due to the Ukraine conflict, energy prices in Europe have soared. The EU has adopted a “de-Russianization” strategy, replacing cheaper Russian pipeline gas with more expensive U.S. liquefied natural gas (LNG) and accelerating the transition to renewable energy.

EU sanctions envoy Dmytro Oshaliv recently stated that Western sanctions on Russia are having a significant impact on its economy, though sanctions are not a cure-all and will inevitably be circumvented. He emphasized that after four years, he is convinced that sanctions have produced tangible effects.

Russian Presidential Envoy Kiryill Dmytriev said, “Without Russia, Europe will lose the battle for competitiveness and will never catch up with the world.”

Carbon pricing is at the core of current competitiveness debates. EU industry executives pointed out that carbon costs in other regions are much lower than in the EU. The EU Emissions Trading System currently sets a carbon price of about 80 euros per ton for industrial sectors, while other countries are much lower.

According to union organization IndustriALL, more than 20 large chemical plants in Europe have closed since 2023, affecting about 30,000 jobs. Industry data shows that investments in Europe’s chemical sector are expected to plummet by over 80% year-on-year by 2025. Meanwhile, German chemical giant BASF has made its largest-ever investment in China, with a factory totaling 8.7 billion euros that began partial operations last December.

(Source: Caixin)