Top business leaders urged the European Union on Wednesday to act urgently to bring down energy prices, saying that was key for European industries to compete with the U.S. and China.
The industries’ message was timed to land just before EU leaders gather in a Belgian castle on Thursday for an informal “retreat” to thrash out a plan for how Europe can compete economically with China and the U.S.
“The next five years will be the most challenging for Europe’s industry in many decades,” CEOs gathered in the city of Antwerp said in a written statement.
“While the situation is dire, the outcome is not inevitable. We can overcome, if you act,” they told the EU leaders, calling for a package of emergency measures to cut energy costs in Europe, and support demand for “made in Europe” products.
The statement was signed by hundreds of CEOs, including the world’s biggest chemical producer BASF and Europe’s biggest steel company ArcelorMittal, as well as several energy groups.
COSTLY ENERGY
Asked what his main message to EU leaders was, Jon Morrish, CEO for Europe of Heidelberg Materials, told Reuters: “Number one, on energy prices, that they must come down. They must take us seriously, and they must realize that that is really hampering Europe’s competitiveness.”
Cement-maker Heidelberg, whose home market is Germany, was starting to move some investments out of Europe due to high energy prices, he said.
Swiss specialty chemicals maker Clariant CEO Conrad Keijzer told Reuters: “Why is Europe so much behind compared to the rest of the world? It’s the energy situation.”
The loss of cheap Russian gas imports following Moscow’s 2022 full-scale invasion of Ukraine hiked bills for many energy-intensive industries. Congested power grids, national taxes and the EU’s CO2 emissions price also contribute to power prices – which for industries in Europe are more than double those in the U.S. and China, EU data shows.
HIGH TAXES
European Commission chief Ursula von der Leyen told the Antwerp summit that she agreed EU countries needed to better link up their power grids, among several proposals to reduce energy bills.
“While energy costs are going down, national taxes on energy are going up. And the taxes that industry pays on electricity are 15 times higher than taxes on gas. This is just wrong,” she said.
NO QUICK FIX
Yet, some companies also acknowledge there is no quick fix, in part because modernising power grids to ensure that cheaper low-carbon energy can flow freely across the bloc will take years.
The EU’s electricity system is designed so that the last power plant needed to meet total demand sets the power price. Often, that is a natural gas plant – leaving many consumers exposed to gas prices, which are significantly higher than in the U.S.
Political will to change that system is scarce. EU governments decided against redesigning the market when they updated the EU’s energy rules in 2024. They have also failed for five years to find the unanimous approval needed to reform EU-level energy tax rules to give low-carbon sources an advantage.
Philippe Kehren, CEO of chemicals multinational Solvay, said the sector now wanted leaders to intervene directly to guarantee stable power prices – potentially by setting a regulated price for industry.
“I don’t see any other option, frankly speaking. … Industries cannot cope with super-volatile, high-level electricity prices,” he told Reuters.
(Reporting by Kate Abnett)
