High gas and electricity prices pose an “imminent risk” of “production losses” and “shutdowns of thousands of European companies,” BusinessEurope, an organization representing European employers, warned Thursday.
In a letter to the President of the European Commission, Ursula von der Leyen, the employers’ association calls for a relaxation of the framework for state aid to companies in difficulty, an urgent decoupling of electricity prices from those of gas, and the mobilization of all available means of electricity production.
“It is urgent to find ways at EU level to mitigate the impact of energy prices that paralyze European businesses, it is a matter of survival,” said the business lobby that includes organizations such as Medef in France or the BDA in Germany, on the eve of a meeting of member states in Brussels on the energy crisis.
The European executive and the 27 Member States have so far struggled to come up with solutions, given the divergent energy mixes and interests of the various countries.
Some “70% of European fertilizer production has been halted or slowed down, while 50% of total aluminium production capacity has been lost. There is a real danger that companies, and in particular energy-intensive industries, will relocate permanently outside Europe,” BusinessEurope said.
“To avoid further production losses, the EU state aid framework must be further adjusted to temporarily allow Member States to grant much needed aid to the affected companies,” she called for.
“Policymakers should urgently consider a temporary EU-wide measure to decouple electricity prices from gas prices. If well designed (…), this measure could effectively lower energy bills,” the business lobby says.
“Every Megawatt hour (of electricity) and every billion cubic meters (of gas) will count this winter. More can and should be done to increase energy supply in Europe. It is extremely important to further intensify external action with suppliers and to deploy additional renewable, nuclear, low-carbon and natural gas capacity in Europe as soon as possible,” BusinessEurope said.
“With many companies on the verge of collapse, all options should be considered to facilitate energy production, including temporary legislative adjustments or moratoriums,” the organization calls, as nuclear reactors are shut down in Belgium and Germany.