Large industrial consumers of electricity represented by the Alliance of Power Intensive Industries warned about an "enormous risk of de-industrialisation" in Europe as a consequence of high electricity prices. "Power is a very important component of our cost structure," says the alliance which includes the alloys, cement, ceramics, chlor-alkali, glass, iron & steel, lime, non-ferrous metals and paper industries. But it says current energy and environmental policy has added to the cost of power beyond anything driven by oil and gas price increases worldwide. The alliance believes failures in the liberalisation of EU gas and electricity markets as well as the unintended consequences of the CO2 emissions trading scheme are to be held accountable. It says both developments are "exclusively European" and therefore call for "a critical review".
The European chemical industry - which claims to be the largest energy consumer in the EU manufacturing sector - says more needs to be done to ensure the ETS does not put European companies at a disadvantage over international competitors. "We must reduce the complexity [of the EU ETS] for example by excluding SMEs, and limit the impact on power prices," said Theo Walthie, from the European Chemical Industry Council (CEFIC). Walthie called for quick action to be taken under the second phase of the scheme, which starts in 2008 until 2012. "We cannot wait until 2013 for a solution," he said. CEFIC believes more use should be made of clean development projects abroad (so-called JI/CDM in UN jargon) to help the EU meet its commitments under the Kyoto Protocol.
The European Trade Union Confederation (ETUC) raised concerns about the employment implications of industries threatening to re-locate to escape high energy costs in Europe. ETUC secretary general John Monk warned about a purely liberal approach to energy policy, saying "public service obligation" needs to be guaranteed to the benefit of citizens. ETUC also points to rising energy prices as a serious concern for households, saying there is an increasing threat of "fuel poverty", particularly in the new member states.
Environmental NGOs criticised the composition of the high-level group as being imbalanced in favour of energy-intensive industries and large energy utilities. "Leading companies […] in the renewable energy and energy efficiency sectors are absent. Consumer and health organisations are absent. Academia and research institutions are absent," the NGOs said in a statement to the group. They recommended that the balance be corrected to better reflect these concerns.
WWF, the global conservation organisation, condemned what it called a "misconception" about the alleged negative effects of the ETS on the competitiveness of European industries. It says the ETS is "by far cheaper" than other options (such as taxes) to achieve CO2 emissions reductions targets, adding the fears are "not justified". "The ETS is expected to result in only modest losses in most traded sectors," the WWF points out. It also points to a study by the ZEW economic research institute in Germany which says the scheme will "not be a job killer". "If employment effects of the EU ETS are compared to impacts of alternative regulation methods assuring the Kyoto targets, ZEW rates the arrangement of the EU ETS among the better choices," says the WWF.