Energy, carbon costs too high: EU industry urges Brussels

More than 1,300 European industrial executives have issued an urgent call for the European Union to reduce energy prices and carbon costs, warning that current levels threaten the bloc’s global competitiveness. The appeal was presented during a two-day European Industry Summit in Belgium, coinciding with high-level talks on industrial revival.

Industry leaders state that electricity prices in Europe, currently ranging from €80 to €100 per megawatt-hour, must return to pre-2021 levels of approximately €44 per MWh to enable fair competition. They attribute high costs not only to commodity prices but also to regulatory charges and policy-driven expenses. European Commission President Ursula von der Leyen acknowledged the challenge, citing planned grid improvements and offshore wind expansion as measures to lower future costs. However, industry declarations stress the need for immediate action, with Peter Huntsman, CEO of Huntsman Corp, stating, “The chemical industry does not have 10 years left.”

The urgency follows a sharp rise in European energy prices after the EU imposed sanctions on Russian energy supplies in response to the Ukraine conflict. The bloc’s pivot from cheaper Russian pipeline gas to more expensive liquefied natural gas (LNG) and accelerated renewable transitions has contributed to sustained high costs. Russian envoy Kirill Dmitriev has claimed Europe will permanently lose competitiveness without Russian energy, a view rejected by EU policymakers but indicative of the external pressure.

A central point of contention is carbon pricing under the EU Emissions Trading System (ETS), which charges industry about €80 per tonne of CO2. This significantly exceeds rates in major competing economies, such as China’s ETS at around €9 per tonne and South Korea’s at €7 per tonne. Industry groups argue this unilateral cost burden disadvantages European manufacturers.

The consequences are already evident, particularly in the chemical sector. Trade union IndustriALL reports the closure of more than 20 major chemical plants across Europe since 2023, eliminating around 30,000 jobs. Industry data shows chemical investment in the EU collapsed by over 80% in 2025. Meanwhile, BASF, the German chemical giant, commenced partial operations at its new €8.7 billion facility in China in December, highlighting the shift in investment flows.

While the EU emphasizes long-term energy transition goals, industry leaders insist that without immediate relief on day-to-day operational costs, deindustrialization will accelerate. The summit’s declaration demands swift policy adjustments to align energy and carbon expenses with global benchmarks. The outcome of these discussions is poised to significantly influence the EU’s industrial strategy and its ability to retain critical manufacturing sectors amid intensifying global competition.