FuelsEurope at the Informal Meeting of EU Energy Ministers in Bratislava: high energy prices result in a competitive disadvantage for the EU Refining industry

At the Informal Meeting of EU Energy Ministers, FuelsEurope presented its views on the current state of energy costs faced by EU refining. FuelsEurope expressed support for the Energy Union’s focus on security of supply and competitiveness, but also raised concern about EU refining’s capacity to compete internationally and attract investment given the disproportionally high energy prices. There is an urgent need for effective carbon leakage protection in ETS as well as continued use of the Refining Fitness Check to ensure a careful assessment of the cumulative impact of new legislation.

FuelsEurope, representing the European refining industry was invited by the Slovak Presidency of the Council of the European Union to express its views on energy prices and industry competitiveness at the Informal Meeting of EU Energy Ministers on 13 July 2016 in Bratislava.

In his keynote speech on energy prices and competitiveness Maroš Šefčovič, EU Commission Vice-President for Energy Union anticipated the release of a study on energy costs and prices by end 2016, which will include an analysis of their impact on the competitiveness of the EU industry.

The intervention of Ministers and other high-level Member States’ Representatives showed a widespread recognition of the critical importance of a competitive industry for the EU economy.

John Cooper, Director General of FuelsEurope, welcomed Vice-President Šefčovič’s recognition of the key role energy prices play for energy intensive industries and reiterated FuelsEurope’s continued support of the Energy Union focus on industrial competitiveness and security of supply.

He commented “the EU Commission’s Refining Fitness Check concluded that energy cost, constituting some 60% of operating costs, coupled with EU-only legislation1 that competitors do not face are two main factors significantly impacting the international competitiveness of EU refining sector. As a result, relocation of manufacturing industry and investment leakage are concrete threats requiring urgent measures”.

Concerns stressed by EU refining industry are echoed by other energy-intensive industries that call for full carbon leakage protection in ETS – including on indirect costs - for best performers in sectors exposed to international competition.

FuelsEurope believes that the recent decline in energy prices, being a global phenomenon, does not eliminate the competitive disadvantage for EU refiners. Expressing appreciation for the inclusion of the energy costs among the priorities of the Slovak Presidency, John Cooper commented that “the existing and upcoming legislation should ensure transparency in energy prices and guarantee a competitive level playing field for EU refining industry. This could be achieved by ensuring that future impact assessments on new regulations take into account the Fitness Check results in order to inform policy-makers on the cumulative impact on competitiveness of EU refining”.

FuelsEurope is ready to work closely with the EU institutions in addressing energy prices and other hurdles undermining the competitiveness of domestic industry.