Without political decision, industry has its back against the wall

We are really in injury time now, high energy prices are really putting us and many other tech companies in big trouble. The price of energy is having far too high an impact on our competitiveness, so we need to avoid companies cutting production. Without a political decision, the industry has its back against the wall. Technology federation Agoria is supported in this position by technology companies such as Umicore, Aurubis, Nyrstar, Aluminium Duffel, Sonaca, Thales, Daxi, JTEKT, Safran Aero Boosters and Halo Steelrings.

The activity and competitiveness of our companies are under severe pressure in Belgium due to a combined effect of rising energy costs and increasing labor costs. Our study service calculated that companies in the technology sector will face an additional burden of 10 billion euros in 2023 compared to 2020. 

For Agoria, the essence of the problem is the huge increase in the price on the natural gas market and its spill-over effect, through the pricing mechanism, on the price of electricity. Measures with the aim of reducing that natural gas price are then a logical first course of action for Agoria. Norway, which almost exclusively commercializes its gas through pipelines to a limited number of EU
countries, stands out the most. 

To limit the spill-over effect from the gas market to the electricity market, Spain and Portugal have already received approval from the European Commission to intervene in the production cost of gas plants. Agoria proposes to introduce such a system, temporarily, on a larger geographical scale. Preferably on a European scale, if that does not seem feasible at least with the countries we are interconnected with.

The price for the emission of 1 ton of CO₂ in the European Emissions Trading System (ETS) has risen sharply recently, to more than €100 per ton of CO₂. A year and a half ago, it was only 30 euros per ton of CO₂. The cost of this CO₂-emission allowances is passed on in the method of calculating the electricity price and thus also indirectly reaches the consumer. "One could temporarily exempt the electricity sector, which is a key actor in the European Emissions Trading System, from buying the allowances at the European level or push more allowances into the European Emissions Trading System through the Market Stability Mechanism (MSR).

Furthermore, a maximum compensation of indirect emission costs is a measure to be kept for Agoria. Agoria also asks to temporarily use the European state aid framework. The European Commission already adopted a state aid framework on March 23, 2022, which was further amended in July 2022. This framework allows, within certain modalities, to compensate affected companies. Several EU member states have already implemented this nationally. Agoria calls on Belgium to also fill in this state aid framework in a targeted way. These are unconventional measures but à la guerre comme à la guerre. None of the proposed measures will be free of criticism or easy to implement, but doing nothing in Belgium is no longer an option. It is now also time in our country to take action that safeguards the competitiveness of our companies.

With a view to the long term, it is also useful for Agoria to continue working on energy efficiency, in which digitalization can play a major role, and to look without taboo at all options in the Belgian energy mix, a licensing policy that facilitates the transition and the use of energy shares.   

Bart Steukers
Chairman Agoria