New guidelines offer only limited protection from increases in electricity prices
“We appreciate the aim of the guidelines that the energy intensive industry, such as steel industry should be protected from artificial increase in electricity prices due to support offered to preferred energy generation technologies”, Gordon Moffat comments on the adoption of the new guidelines for energy and environmental state aid today by the European Commission and adds, “however the 15 per cent minimum contribution to national renewables subsidies will still lead to a further substantial increase in energy costs for many energy intensive companies in the EU, costs which competitors do not have to bear”.
“The problem is”, says Moffat, “not the exemptions for industry but the subsidies themselves. Industrial electricity prices are already today higher than in most other countries on the globe and twice as high as in the US. We cannot operate an industry that is producing globally traded products such as steel where you have differentials in cost that are so horrendous”, stresses Gordon Moffat, Director General EUROFER the starting position for the need for new energy and environmental state aid guidelines.
“Green policies have had the greatest impact on energy prices, especially subsidies for renewables, which have completely de-stabilised the energy markets in Europe”, Moffat says. Since 2008, a large part of the public expenditure assessed has served to promote renewable energy, such as wind and solar energy. Increasingly, Member States have granted State aid also to measures such as energy infrastructure projects or security of supply measures.
Therefore the new State Aid guideline is the most urgent issue for energy intensive sectors. The 2030 framework should be based on the principle of energy supply at affordable and competitive prices.
The new Guidelines define criteria for assessing public support to energy or environmental projects and aim at helping Member States to design measures that contribute to reaching their 2020 climate targets, while ensuring they are cost-effective and do not cause undue distortions of competition.
Representing by EUROFER, the European steel industry represents the world leader in its sector, producing on average 170 million of tonnes of steel per year with direct employment of 350.000 highly skilled people. More than 500 steel production and processing sites in 24 member states provide direct and indirect employment for millions of European citizens.
Barbara Herbst, Communication Manager +32 2 738 79 32 (email@example.com)
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