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CEPI and European industry associations call for action against explosion in energy costs

13 Jan 2022 − 

European papermakers see competitiveness and profitability of energy-intensive companies severely affected.

Together with other energy-intensive industries, the Confederation of European Paper Industries (CEPI) is calling on EU leaders to take swift action against the exponential rise in energy prices. In recent months, energy prices have risen by a factor of four to five and have recently reached even higher levels, CEPI said in a joint statement with other European industry associations concerned. In parallel, carbon prices have tripled since the beginning of the year. The current phase of unacceptably high energy prices in Europe is already undermining the structural measures to secure affordable low-carbon energy that is needed to achieve the goals of the EU's Green Deal, the statement adds.

CEPI and the other associations consider the main reasons for the situation to be financial market speculation by financial players such as hedge funds and commodity trading houses, imbalances in the gas market, seasonally lower renewable energy production, reduced nuclear energy production, coal mine closures and increased carbon costs passed on to electricity prices. As a result, many industrial energy consumers have been forced to reduce or temporarily close their plants, they say.

The associations see the competitiveness and profitability of European energy-intensive companies severely affected, as they are the most vulnerable to dramatic price spikes. Energy costs make up a large part of their production and operating costs. Therefore, a prolonged period of unbearably high energy prices could lead to serious losses, the relocation of European companies and an increase in carbon emissions, they explain in their statement.

CEPI and the other industries explain that the energy crisis threatens the future of carbon-free investments and existing low-carbon projects in Europe. They call for fast action that is needed to secure the investments of energy-intensive industries and to meet the challenge of decarbonisation. If adequate financing is not provided, decarbonisation could become an even greater challenge, they say.

The signatories of the declaration say there are many tools at the disposal of EU leaders to tackle the current crisis. They call on national authorities to quickly exploit the full potential of the instruments presented by the European Commission in October. In addition, urgent action is needed at EU level to enable the affected companies to overcome this situation, which is likely to last for months, and to continue investing in the energy transition in Europe.

Furthermore, CEPI and the other associations see in the current situation the need for a reform of the Emissions Trading Scheme Directive which incorporates measures to ensure effective protection against carbon leakage and to prevent a sudden increase in EUA prices that would have a negative impact on energy costs.

In addition to CEPI, the signatories of the joint declaration are the European cement industry Association Cembureau, the European ceramics industry association Cerame-Unie, the European lime industry Association EuLa, the European ferro-alloy Producers Association Euroalliages, the European steel producers association Eurofer, the association of European non-ferrous metals producers Eurometaux, the European association of expanded clay producers Exca, the association of European fertiliser producers Fertilizers Europe, the association of European glass producers Glass Alliance Europe and the European association of industrial energy users Ifiec.

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