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October 5, 2022

EURATEX urges price cap in wake of EU Energy Council decision

The European Textiles Association (EURATEX) has called for a cap on Europe’s gas prices and the adoption of a “European vision” in response to the Energy Council's proposal to address high energy prices.

By Shemona Safaya

Earlier last month, EURATEX welcomed proposals from the European Commission on tackling the energy crisis in the region but acknowledged they “lacked ambition” and were coming at the cost of losing industrial capacity and jobs across Europe.

On 30 September, the European Union Energy ministers approved a Council Regulation proposal to address the high energy prices. The Regulation focuses on the electricity prices and electricity demand reduction, on a solidarity levy from the fossil fuel sector and a retail levy for small and medium-sized enterprises (SMEs).

However, EURATEX believes, while these initiatives are driven by goodwill, they miss the point of bringing gas prices down – the one measure they say would bring the biggest impact on European industry.

It remarked: “The Regulation does not foresee any meaningful action to directly support the European industry. This can accelerate the de-industrialisation of Europe and loss of industrial capacity to secure the european standard of living and implementing the Green Deal.”

EURATEX director general Dirk Vantyghem, said: “We call on the EU and Member States to pursue our common European interests. The hesitation to adopt a European price cap on natural gas, accompanied by massive national spending programs to subsidise domestic gas consumption, is a dereliction of duty.”

Further, EURATEX says this will trigger competition among member states rather than promoting cooperation in bringing gas prices down for all European companies and will also prove ineffective: indeed, the industrial structure in the European Union is fully integrated. Once a segment of the value chain perishes because of the crisis in one country, all companies based in the EU will suffer its negative effect, driving prices up in the supply chain and adding further strain to the operations, the Association says. The European industry will be saved as a unified industry, or it will not be saved at all. Fragmenting the internal market will not protect any member state’s domestic manufacturing.

In addition to a EU-wide price cap on gas, EURATEX is calling on the European Commission to swiftly amend the Temporary Crisis Framework, making sure the criteria and thresholds applied do not exclude vulnerable companies from possible support (e.g. in textile finishing and services). They also encourage the European Commission to revise the ETS Indirect Carbon Leakage mechanism and include the man-made fibres, non-wovens, spinning and weaving sectors.

EURATEX said it is high time now for the European Union – in particular for Member States and the Commission – “to step up their ambition and adopt a European vision: a chaotic and fragmented approach will not mitigate the crisis but accelerate it.”

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