Inflation, energy, climate: 150,000 jobs threatened in industry (study)

Rising energy prices and the phasing out of free CO2 emission allowances threaten 154,500 industrial jobs in France. Industrialists fear that the implementation of the carbon adjustment mechanism at borders will penalize the competitiveness of European exports in the face of foreign competition.

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Rising energy prices and the phasing out of free CO2 emission allowances in Europe threaten more than 150,000 industrial jobs in France, a pro-industry think tank said Thursday.

According to this study published by the think tank La Fabrique de l’Industrie with the consulting firm Olivier Wyman, the European energy crisis threatens 154,500 industrial jobs in the medium term, or “nearly 6%” of the 2.7 million full-time equivalent employees in French industry.

Of this total, 117,000 came from “the sustained doubling of energy prices in Europe while they remain stable in the rest of the world”, particularly in the United States where the industry has received support from the openly protectionist Inflation Reduction Act(IRA) of Joe Biden’s administration. Some 37,500 other job losses would result from the “negative consequences of the implementation of the carbon adjustment mechanism at the borders (MACF)” under discussion in Brussels to regulate greenhouse gas emissions generated by products imported into Europe, according to the study.

This mechanism includes the gradual elimination of free CO2 emission allowances from which entire sectors of heavy industry have benefited since 2013 to encourage them to decarbonize their activities by avoiding relocation. These companies will soon have to pay for their pollution rights. However, while the introduction of the MACF was at one time seen as a way of putting an end to the “climate dumping” of certain trading powers, industrialists point to the shortcomings of the system: they argue in particular that the MACF will only tax entries into the European domestic market and will weigh on the competitiveness of European exports “in the face of foreign competition that will not have suffered the same upstream carbon costs”.

In order for European and non-European producers to be on the same footing, the MACF would have had to work “in reverse” for exports, by clearing them of the carbon price paid during their production in Europe. This is not the choice that was made,” the study notes.

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