EU fears energy costs give USA competitive advantage

As a number of European economies remain suppressed and restrained consumer spending continues, energy policy is influencing debates on how increasing energy bills (particularly the push for renewables) are limited household disposable income. The EU Industry Commissioner, Antonio Tajani, has been quoted in the press as saying:

“I am in favour of a green agenda, but we can’t be religious about this. We need a new energy policy. We have to stop pretending because we can’t sacrifice Europe’s industry for climate goals that are not realistic and are not being enforced worldwide. When people choose whether to invest in Europe or the US, what they think about most is the cost of energy.”

A report by the American Chemistry Council said shale gas has given the US a “profound and sustained competitive advantage” in chemicals, plastics, and related industries.

European president, Herman Van Rompuy, echoed the growing sense of alarm, calling it a top EU priority to reduce energy costs. “Compared to US competitors, European industry pays today twice as much for electricity and four times as much for gas. Our companies don’t get the rewards for being more efficient,” he said.

Europe’s deepening energy crisis has for now replaced debt troubles as the region’s top worry, with major implications for the Commission’s draft paper on shale expected this month. The EU’s industry and environment directorates are pitted against each other. The new legislation could (in theory) stop Britain, Poland, and others going ahead with fracking.

Mr Tajani is in favour of shale gas in Europe. He said the crisis is compounded by the tight monetary policy of the European Central Bank, which has failed to alleviate a serious credit crunch for small firms in Italy, Spain, and the Eurozone periphery.

For more information, help or advice please contact Andrew Davison on 0191 211 7950.