Eurelectric has the recipe to facilitate the reindustrialization of Europe: fewer taxes on electricity companies. Leonhard Birnbaum, President of the European employers’ association and CEO of E.ON, explained in an interview with Reutersthat the problems for Europe’s energy-intensive industries are many, including a more fragmented market than China and difficult access to credit, but that policymakers seeking to offer quick relief must “boot” energy prices any costs not related to the structure of the industry.
For this reason, it recommends that governments target the high taxes on energy on the continent, which are eroding competitiveness, the head of the European electricity lobby told the agency.
The European Union is drawing up a package of support measures for industries in crisis, which will be presented next week.
“We are aware that states always need more money, but if you really want to electrify, you cannot have, for example, a tax burden on electricity that is excessive in proportion to that on gas,” declared Birnbaum.
“If we are serious about cost competitiveness, if we are serious about electrification, if we are serious about decarbonization, I think we have to act on it,” he told Reuters.
EU industries pay electricity prices 2-3 times higher than those in the US. Taxes represented, on average, 23% of the retail electricity price paid by energy-intensive European companies in 2023, according to an analysis by Bruegel. But many of these taxes are imposed by national governments and are beyond the control of the EU.
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