European industry are in danger of crushing energy crisisas excruciating energy prices force them to reduce energy consumption through their own production, their competitiveness, their global market share and, ultimately, their sustainability. If European industry is crushed by the energy crisis, it will take 35 million workers, 15% of the economically active population, with it.

The situation worries politicians and businessmen who express fear that the energy crisis will lead to deindustrialization Europe. Belgian Prime Minister Alexandre de Croix warns of a wave of deindustrialization in Europe, and the European Round Table, leaders of Europe’s largest industries, in a letter to the President of the Commission expresses concern that “a surge in energy prices is undermining the competitiveness of European industry.”

Belgian Prime Minister Alexandre de Croo warns of a wave of deindustrialization in Europe.

Many European businesses follow the system adopted by utilities and cities in many parts of Europe and turn off the thermostat. However, as highlighted in a related report by the Financial Times, the problem is not limited to the colder temperatures that their staff have to work in. There are already signs that, even before winter sets in, many of Europe’s major industries are cutting production in some sectors due to energy shortages, while others are moving some of their production elsewhere where they can find cheaper energy. Car manufacturer Renault has already limited the amount of time car paints stay at high temperatures to limit energy consumption, since this process of heating paints accounts for 40% of the natural gas consumed.

Paper maker DS Smith has ordered its divisions to cut energy consumption by 15% in accordance with an EU agreement. in July. French car supplier Valeo is cutting energy consumption by 20% through measures such as shutting down production over the weekend and lowering temperatures in production facilities during the week. And the Belgian chemical company Solvay plans to cut gas consumption by 30%. The leaders of these industries, which run the gamut from chemicals to fertilizers to ceramics, warn that they risk losing market share permanently and irreversibly and will be forced to relocate some of their production elsewhere in search of cheaper energy. For the same reasons, Europe’s largest steel maker ArcelorMittal forecasts its European production to be 17% lower this quarter compared to the corresponding period last year. Finally, metals trading company Eurometaux reports that all zinc smelters in the EU have been forced to limit or even shut down entirely, while aluminum production in the EU has already fallen by 50%.

Overall, European industry accounts for between 27% and 28% of the EU’s energy supply, according to Anouk Honoré, deputy director of the research program at the Oxford Institute for Energy Studies. And, of course, it is not always easy to reduce the use of fuel in many industrial processes. About 60% of gas consumption by industry is associated with processes that require high temperatures of 500 degrees Celsius and above. Among them are the production of glass, cement and ceramics. As Honoré emphasizes, “for processes requiring lower temperatures, there are many more opportunities to use renewable energy sources.” In the meantime, however, industries that have turned to renewable energy are taking a step back and returning to fossil fuels to deal with the energy crisis. The German pharmaceutical company Bayer, for example, has announced since 2019 that it plans to switch completely to renewable sources. Then, however, he brought back coal as an alternative in case he could not meet the heating needs of industrial production. And the drought that hit much of Europe this summer has drastically reduced hydropower production, while in France, technical problems at nuclear reactors have forced them to shut down, leaving demand unsatisfied.