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The ETUC on the energy crisis

At the end of June, the ETUC’s Executive Committee adopted a resolution on the energy price crisis.

This resolution points out that the skyrocketing prices of oil, gas, and electricity – not least due to Russia’s invasion of Ukraine  – have reduced the purchasing power of many EU citizens and increased energy poverty.

It calls for the EU to rapidly and drastically reduce its dependency on Russian fossil fuel imports while working towards achieving the European Green Deal’s objectives. The ETUC stresses that climate action is part of the solution to ensure sufficient energy supply, energy security, and energy affordability, as well as to reduce fluctuation of energy prices and the availability of raw materials.

At the same time – continues the resolution - policymakers need to speed up and scale up policy measures supporting the most affected consumers, workers, and companies. The ETUC then provides concrete proposals for measures that it finds necessary to protect vulnerable EU citizens from the negative consequences of the crisis. The rise in energy prices directly affects workers’ purchasing power as they see their energy bills increase, often at a higher rate than their wages. This is especially the case for low- and middle-income households who have signed flexible energy contracts, as already before the crisis over 34 million people in the European Union were experiencing energy poverty.

The ETUC then reviews the main actions and measures taken by the EU in the latest period. This starts with the toolbox launched last October, which provides a list of measures that Member States can take to ease the burden on consumers in the short term. Then in March 2022 the Commission adopted the REPowerEU Plan, a joint European action for more affordable, secure and sustainable energy to reduce the EU’s dependence on Russian gas imports and mitigating the energy price crisis, supplemented by more detailed measures announced on 18 May. A third Communication followed on 23 March, entitled ‘Security of supply and affordable energy prices’, to mitigate high energy prices with common gas purchases and minimum gas storage obligations, listing also compensation measures and direct support for poor end-users that include safeguards against disconnections, tax reductions, the reform of renewable support schemes, and the provision of state aid to companies and industries.

While welcoming the measures, the ETUC also warned that policymakers should pay attention not to replace one dependency by another. It should be kept in mind that some political regimes of countries exporting fossil fuels are in breach of human rights. At the same time, methods such as fracking have a very high carbon footprint. Any new agreements should therefore be concluded based on robust impact assessments and should include strong conditions when it comes to the respect of democratic values, human rights, workers’ rights and environmental protection. The ETUC adds that future contracts related to the import of fossil fuel energy should keep the climate policy objectives of the European Green Deal in mind and make sure that these fossil fuel contracts remain limited to short periods of time. If new infrastructures for fossil fuels are built, it should be ready for use in the future to import climate-neutral hydrogen. The ETUC insists on the need to make the ‘energy efficiency first principle’ and energy savings core elements of the REPower EU strategy. EU countries should, for example, step up their building renovation strategies with public planning and public investment to help lower-income households first.

The ETUC expresses its deep concern that ‘the Social Dimension of the current crisis, and the challenge it poses in connection with the dramatic changes that we need to urgently undergo, is largely missing from the REPowerEU Plan’. The ETUC demands further public investment and calls on EU policymakers to revise and redesign the EU Fiscal Framework, allowing for more flexibility in the Stability and Growth Pact. In parallel, policymakers should look for additional sources of revenue through fairer and effective taxation. According to the ETUC Executive Committee, the EU should strongly encourage Member States to tax the windfall profits made by energy companies and market actors because of the energy price crisis, calling also on Member States to implement extraordinary measures to protect workers and companies in difficulty.

Beyond urgent measures to support consumers and workers, the ETUC urges EU policymakers to look more closely at the current functioning of the EU energy market.

IndustriAll on gas-reduction plans

On 20 July 2022, the European Commission launched proposals to the EU Member States on how reduced gas demand should be achieved in the face of reduced supply and the war in Ukraine, with the European Gas Demand Reduction Plan and a new legal instrument fit for that purpose. IndustriAll acknowledges that cooperation and solidarity between European countries is critical in the weeks and months ahead but calls the attention of European policymakers to the fact that workers impacted by gas and energy reductions must also be shown solidarity by employers and governments.

IndustriAll Europe’s General Secretary Luc Triangle stressed, ‘These proposals will have enormous implications for our members and workers across Europe – there must be detailed social impact assessments and dialogue with the social partners to ensure that we do not inflict further long-term damage on our societies in responding to this critical situation’. The union also stresses that beside rescue packages to cushion the impact on citizens, measures are needed to ensure decent industrial work in the form of financing, capital aid and guarantees.

The current situation is a monumental challenge for the EU, but IndustriAll finds that all means must be used to ensure a functioning gas supply even in the event of a lack of deliveries from Russia. It argues that foundation industries must be considered of strategic importance and protected as such in the energy supply crisis. In addition to the significant number of jobs at stake in the energy-intensive industries’ ecosystem, these are the cornerstone of Europe’s strategic autonomy since they provide basic products and materials crucial for the European economy.

Business Europe on the Industrial Emissions Directive (IED 2.0)

Business Europe says that the high energy prices, the disrupted supply chains and high inflation pose existential difficulties to companies who have already been under pressure in the last years due to the Covid-19 crisis. The dramatic situation calls for an EU policy framework which mitigates these severe challenges while supporting the necessary industrial transformation required for delivering the long-term objectives of the Green Deal. The European employer federation expresses its concerns that the proposed revision of the Industrial Emissions Directive (IED 2.0) departs from these imperatives. While it acknowledges the European Commission’s intentions to streamline the Directive, promote innovation and reduce emissions, it does not see the current proposal as reaching these goals. On the contrary, says Business Europe, the new proposed requirements lead to legal uncertainties, risking to prolong and complicate the permit procedures, and undermine the ongoing industrial transformation, not considering the operating periods nor the investment cycles of industrial plants.

According to the employer federation, the novelty of the IED 2.0 is that environmental performance limit values would become binding, and this new obligation could undermine industrial transformation and innovation, as the environmental performance associated levels from the Best Available Techniques (BAT) conclusions would not capture the specificities from different processes of certain types of installations. Business Europe finds that setting all permit conditions at the lowest ends of the BAT range is technically impossible for any installation: a plant can emit different pollutants and it cannot comply with the lowest emission limit values for each and every individual parameter.