EU energy policy must assist industrial competitiveness

Policy and industry stakeholders discuss different policy options at high level conference.

By Dods EU monitoring

19 Nov 2014

Please note that this does not constitute a formal record of the proceedings of the meeting. It is dependent on interpretation and acts as an unofficial summary of the debate.

On November 17, Business Bridge Europe, in cooperation with the European Commission, held a full day conference on EU Energy policy and competitiveness. The conference brought together high-level representatives of national and European institutions, authorities, industry, research centres, academics and civil society. It offered the opportunity to analyse and discuss the components of an EU energy Union that is able to contribute to boosting European industrial competitiveness: economic, financial and technological conditions required to develop renewable energy and other domestic energy resources in order to reduce European dependence on third-country suppliers; development of infrastructure and internal as well as cross-border interconnections; overhaul of national practices on energy levies, tax components of energy prices and network costs; completion and improvement of the functioning of the EU internal energy market; moderation of energy demand and increase of energy efficiency; adjustment of the EU emissions trading system (ETS); diversification of suppliers and supply routes; etc. Please find a summary of the discussions below.

Maroš Šefčovic, Commission Vice-President for Energy Union, opened the conference on EU Energy Policy and Competitiveness which, in his view, should look at the complex environment and the new realities in the global energy markets, which pose serious challenges to the EU competitiveness.

“Within the EU, energy bills for EU consumers are rising. This is in part due to the pressure of rising global demand on resources, but also to the costs linked to an ageing infrastructure and Member States' decisions on tariffs, levies and taxes. While Europe's dependence on fossil fuel imports is increasing, outside Europe, indigenous production of oil and gas is leading to a widening gap between industrial energy prices, in particular with the US” the Vice President said.

Against this background, the Vice President continued, President Juncker has made clear his intention to give priority for the coming years to the construction of a resilient Energy Union with a forward looking climate change policy. He himself would also like to build an Energy Union aiming at affordable, secure and sustainable energy".  In this respect he referred to the agreement on the climate and energy framework by EU leaders, the European Energy Security Strategy and the progress in the implementation of the Internal Energy Market. He then presented the five pillars of his strategy for the Energy Union.

You may access his full speech here.

Jerzy Buzek (EPP, PL), Chair of the ITRE committee, European Parliament, said that the EU energy security strategy has to be seen as an exit strategy from the crisis as well as a solidarity strategy. The aim is also to see how to compete when the rules of competition are unfair.

He then referred to the strategy adopted by the European Commission for reindustrialising Europe, and how to ensure a secure and affordable supply of energy is crucial in this respect. The inclusion of an energy article in the Lisbon Treaty indicates the importance the EU now grants to the issue, he added, and recalled that implementation of the existing legislation is what is left to move closer to the objectives this article establishes.

He concluded that the idea for an Energy Union is the European Parliament’s European Energy Community proposal in sense, but updated. For instance, the idea of coordinating common purchases is included. He added that to achieve the goals set by the Energy Union strategy cooperation among 10 Commissioners is needed.

Claudio De Vincenti, Italian Deputy Minister for Economic Development, responsible for energy, took the floor next. He opened his speech by saying that there are two signals that the EU needs to make considerable steps forward in order to bring together an energy policy that would boost the competitiveness of the EU industrial policy. He added that prices for differ considerably from one Member State to the other, so there is no level playing field for companies in Europe. Another indicator is the price differential between the EU countries and the other industrialised areas of the world. The price of gas in the EU can be 3-4 times higher than in the US, Russia, India or China. Electricity prices are also double than those of international competitors. This does create problems with the competitiveness of the European economy; the EU has recently experienced a reduction of production in the high energy intensive countries. Against this background, the European Commission has come forward with the Communication on industrial policy which aims at bringing the share of industry to Europe’s GDP to 20%. Europe has also to be pioneer in the world when it comes to reducing emissions, he continued. In this way, it can promote the harmonisation of the conditions on which the European businesses work with those in other areas of the world.

Secondly, he referred to the security of energy supply in the European continent. He pointed out that it is in the EU interest to strengthen the interconnection with third countries, which means mainly looking at new gas pipelines such as the TAP one, as well as at the regasification plans, which would allow the better use of gas supplies. He then referred to the European Union conference with the Mediterranean countries which would look at interconnecting the EU with its Mediterranean neighbours.

Thirdly, he referred to the energy efficiency and how to develop renewable sources of energy on a cost effective footing. He added that the isolation of certain areas of the EU has to be overcome through better interconnection. In this respect, he called for the rapid implementation of projects through the TEN-E, and the quick implementation of the Third Energy Package.  The aim is to ensure that the situation in the EU is fairer and to be aware of capacities and ensure transparency of the internal market.

He concluded that the Council of December would focus on the creation of internal market, energy security and the governance of the energy and climate package.

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