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17th Apr 2021

Industry bosses demand EU action on soaring energy prices

  • 4 million EU manufacturing jobs have been lost in the past five years (Photo: arbyreed)

EU leaders must address rising energy prices and climate policies which are crippling the bloc's manufacturing sector, according to a manifesto signed by more than 100 industry bosses.

One hundred and thirty seven chief executives, including the heads of Tata Steel, Arcelor Mittal, and Rio Tinto, signed up to a paper published by the International Federation of Industrial Energy Consumers (IFIEC) Europe on Thursday (27 February).

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"EU economic recovery and reversing trends in employment will not happen without industry," the paper states.

EU leaders will gather in Brussels on 21 and 22 March for a summit focused on the EU's industrial competitiveness and how to reinvigorate the bloc's rapidly eroding manufacturing base.

The EU's manufacturing sector has been in steady decline for the past 20 years and now accounts for just 15 percent of economic output. Meanwhile, 4 million manufacturing jobs across Europe have been lost since 2008, according to the European Commission's latest figures.

The continent's industrial powerhouse, Germany, along with the Nordic countries and most of northern Europe, is still performing relatively strongly. But what is of most concern is that some of the bloc's crisis-countries, such as Spain, Italy, and Greece, all of which are now remodelling their economies on increasing exports, have all seen steep falls in their manufacturing output since 2000.

The commission estimates that every euro of industrial production generates another 50 cents in other parts of the economy and has called for "an industrial Renaissance" in Europe. It wants industry to account for 20 percent of the bloc's GDP by 2020.

Firms are particularly keen for leaders to address rising energy costs which are now between two and three times higher in the EU than in the US. Lawmakers should complete the EU's internal energy market and "speed up the exploration of shale gas in an environmentally acceptable way," according to the industry paper.

But the EU remains under pressure to reconcile a need to re-energise its industrial base with its environmental commitments.

In January, the commission unveiled plans to revise its greenhouse-gas reduction target to 40 percent in 2030 compared with 20 percent in 2020.

The carbon goal would be the only legally binding one on governments after 2020, replacing all national targets for renewable energy.

But governments appear to be minded towards meeting the demands of industry instead.

A leaked UK government paper in advance of the EU summit urges governments to reach an early agreement on the new 40 percent emissions targets but which allows countries to use new energy sources such as shale. It also backs plans for a pan-EU strategy to ensure that industry has access to essential raw materials.

"The EU needs a razor sharp focus on creating an environment that lets industries grow and succeed," a UK diplomat told this website.

"If we get these conditions right then there's a real opportunity for a significant re-shoring of industry to Europe, welcoming back those jobs that were lost to other parts of the world".

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