Leonhard Birnbaum, President of Eurelectric, has urged European governments to reduce high energy taxes to support struggling industries.

A senior EU official noted that simply cutting taxes would offer limited relief, stressing the need for broader measures to enhance European industrial competitiveness, particularly against China.

In 2023, energy-intensive industries in the EU faced electricity prices that were 2-3 times higher than those in the U.S., with taxes making up an average of 23% of retail electricity prices, according to the think-tank Bruegel.

Birnbaum highlighted several challenges for energy-intensive industries, including a fragmented market compared to China and difficulties in accessing credit.

Many energy taxes are imposed by national governments, which complicates EU efforts to implement tax reforms aimed at promoting cleaner energy sources, a process that has been stalled since 2021.

The EU is preparing to release a plan on affordable energy prices, but tax reforms are lagging, raising questions about what additional measures Brussels can offer.

In November 2023, wholesale power prices in Europe hit their highest levels in over a year, although they remain lower than the peak prices seen in 2022 due to the ongoing impact of the Russian invasion of Ukraine.

Birnbaum called on policymakers to eliminate costs unrelated to the industry's structure from energy prices to improve competitiveness.

The official suggested utilizing trade and competition policy tools as part of a more comprehensive strategy to support industries.

The European Union is set to unveil a package of measures to assist industries in early 2024, amid warnings from major manufacturers about potential plant closures and job losses.