EU energy measures necessary but not enough: industry

Several gas-intensive industry associations have welcomed measures proposed by the European Commission to address high gas prices but called for much greater action.

Fertilizers Europe welcomed the commission's proposals on a possible price cap and alternative benchmarks for gas, and said that the proposed solidarity contribution mechanism "might provide an immediate relief to energy-intensive industries", as long as it is implemented quickly. But further steps are necessary, as some of these changes require time that "our industry doesn't have", the association added.

Glass Alliance Europe also welcomed the commission's recognition that targeted support was needed for the glass industry, saying this was "encouraging for all actors in the glass sector". But the industry is not yet entitled to any dedicated EU support schemes, meaning that such "targeted support" needs to be rapidly implemented and directed towards the sector. Without these "urgent and decisive actions" to control the price of gas and provide relief to the industry, "terribly harsh months ahead are to be feared in the glass sector", the alliance said. It also called for the EU to adjust two state aid guidelines, namely the indirect costs under the EU ETS scheme, and the temporary crisis framework, so as to provide the glass industry with quicker and greater access to EU compensation for high prices.

Industry association European Aluminium also welcomed the measures, but added that they are "not enough and will not save the energy-intensive aluminium industry from further production cuts, job losses, and possibly a complete breakdown".

The association urged the commission to take more action at its next council meeting on 30 September and called on the proceeds from the temporary solidarity contribution to finance schemes under the EU temporary state aid framework to support critical industries.

"Not only our competitiveness is at stake; the European aluminium industry is facing eradication", European Aluminium director Paul Voss said.

Energy costs account for 40pc of total primary production costs under normal conditions, the association said, adding that it expects a staggering loss of 1.1mn t, or 50pc, in primary aluminium production capacity by the end of this year.

Commission president Ursula von der Leyen's speech on 14 September outlined the EU's plans for electricity and gas markets, including solidarity contributions, windfall taxes on excess profits, and a cap for inframarginal power producers at €180/MWh. The commission will also examine the possibility of forming an alternative gas benchmark and will consider a price cap on gas.

By Brendan A'Hearn and Auguste Breteau