Czech industry proposes urgent energy cost mitigating measures

Representatives of energy-intensive industries in Czech Republic, including steelmakers, have asked Prime Minister Petr Fila to implement six measures to mitigate soaring energy prices and prevent industry from collapsing, Kallanish notes.

The share of industry in Czech GDP is about 30%, which ranks the country among the most industrialised in the world. Extreme energy prices threaten the foundations of the Czech economy and social stability, the industry representatives say in an open letter to Fila. The situation is particularly dramatic in energy-intensive industries that supply products to thousands of companies in downstream industries, from construction to agriculture and engineering.

Czech industry faces the threat of being unable to compete from third countries from outside the EU that have affordable energy, but also with firms in other EU countries that have introduced reforms sooner.

“We want the government to look for a domestic solution to the energy crisis. At the same time, we are anxiously awaiting the results of the meeting of [EU] energy ministers, which takes place on 9 September. We must certainly be active at the European level as well and support a reasonable and gradual path to a low-emission economy,” says Czech and Slovak steel association Steel Union chairman Daniel Urban.

The proposed measures include capping energy prices as quickly as possible, and introducing an incentive for large consumers to save natural gas by offering financial compensation in the form of auctions for voluntary reductions in consumption. Also proposed are the start of a European debate on suspending or changing the system of trading emission allowances, and approval of the programme to help companies according to the temporary EU state support framework.

Finally, short-time working packages should be activated in the event layoffs occur, and there should be an intensification of support for the technological and climate transformation of Czech industry, the industry representatives say.

Adam Smith Poland