This week's proposals from the European Commission to reduce soaring energy prices and help households and businesses through the crisis are not enough, several European industry associations say.
On Wednesday, the Commission said it would propose a revenue cap for companies producing electricity at a low cost and a "crisis contribution" from the extra profits of fossil fuel companies in a plan to raise $140 billion (140 billion euros) to cushion the energy crisis blow to European citizens and economy. The EU will also look to reform the electricity market to decouple the dominant influence of gas on the price of electricity, European Commission President Ursula von der Leyen said.
Reacting to the Commission's plan to tackle the crisis, European Aluminium, the association of the aluminum industry in Europe, said that the proposed emergency measures "are necessary but not enough to help aluminium industry survive winter."
"These measures 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 added.
Soaring energy prices have prompted a wave of aluminum capacity cuts across Europe as smelters reel from sky-high gas and power prices while demand remains soft due to concerns about global economic growth.
Due to the high energy costs, the European metals industry last week called on the EU for emergency action to prevent a collapse of the sector which faces an existential threat from surging power and gas prices.
The fertilizer industry is also suffering from natural gas prices 15 times the pre-crisis level, 10 times more than the U.S. prices, and well above the prices in Asia, the Fertilizers Europe group said last week in a letter to Commission President von der Leyen.
"For many energy-intensive industries there is currently no business case to continue production in Europe nor visibility and certainty for investments and further developments. The effects of those closures are also starting to have a severe impact on our value chains endangering European industrial base and the availability of essential products more broadly," Fertilizers Europe said ahead of the proposals put forward by the Commission.
After the proposals, Fertilizers Europe director general Jacob Hansen told Reuters:
"We need a physical supply of competitively priced gas for the European fertilizer producers to restart production."
The EU energy ministers are meeting on September 30 to discuss the Commission's plan.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
- UK Puts A Cap On Household Energy Bills
- China Could Ease Europe’s Diesel Shortage
- Another European Steel Plant Scales Back Amid Ongoing Energy Crisis