Brussels energy laws ‘cost UK economy £93.2bn’

By Michael Stones contact

- Last updated on GMT

Failed EU energy policy is costing the British economy billions of pounds, claimed the campaign group
Failed EU energy policy is costing the British economy billions of pounds, claimed the campaign group
EU energy regulations cost the UK economy up to £93.2bn, in excessively high energy prices, and threaten 1.5M jobs, claims news research from Business for Britain (BfB).

The organisation – which campaigns to renegotiate Britain’s EU membership – claimed distorted energy prices were driving some companies to relocate to areas with lower energy cost. Making energy savings in food and drink manufacturing is the subject of a free, one-hour, independent webinar​ to be staged at 11am GMT on Thursday September 18. See the end of this article for more details.

BfB said inflated EU prices accounted for about 9% of the energy costs of the biggest users such as glass makers and ceramic manufacturers. It based the claims on official government impact assessments and analysis of energy-intensive industries. 

Excessive regulations

Member States should be given the power to determine the appropriate energy mix to enable them to meet EU emissions targets, without subjecting firms to the burden of excessive regulations, argued the campaign group. See the report’s key findings at the end of this article.

BfB’s research does not dispute that UK policies have independently driven up the cost of energy. It does argue though that by giving Member States the freedom to change energy laws and have a greater say over how to implement directives, the EU can substantially reduce the cost burden faced by businesses across Europe and enable Member States to design bespoke policies for their specific national needs.

The campaign group’s chief executive Matthew Elliott said British business was paying the price for the EU’s failed energy policy. “Poorly designed policy and unrealistic targets have conspired to help push up energy bills and put jobs at risk, but failed to open up the market to cross border trade,”​ he said.

“Renegotiation offers a once in a generation opportunity to get a better deal for British businesses and fix the EU’s broken energy policy. It’s time for the Commission to make good on its commitment to subsidiarity and allow Member States to decide themselves how they meet EU emissions targets.”

Free, one-hour independent webinar

Meanwhile, don’t miss the Food Manufacture Group’s free, one-hour, independent webinar​ on the new Energy Savings Opportunity Scheme (ESOS) at 11am GMT on Thursday September 18.

The online seminar will provide the latest advice on how to comply with the new mandatory legislation and how to make savings for your food and drink manufacturing business.

Taking part in the online seminar – staged in partnership with energy efficiency specialist JRP Solutions – will be representatives from government, the Food and Drink Federation and JRP Solutions. See the speaker list below.

Speakers will deliver short presentations on how the mandatory ESOS scheme is likely to affect food and drink businesses that employ more than 250 workers, and how they should plan to make savings. The webinar will end with a question and answer session.

Online registration is straightforward and you can submit a question to our expert panel, in advance, by emailing Michael.stones@wrbm.com.

 

Energy webinar speakers

• Martin Adams, ESOS team leader, Energy Efficiency Deployment Office

• Stephen Reeson, FDF head of climate change and energy policy

• Jes Rutter, md JRP Solutions

• Food and drink manufacturer

 

Reserve your free place here​.

 

BfB key findings

• Energy prices in the EU are among the highest in the developed world. Medium-sized industrial consumers in the EU pay around 20% more for electricity than companies in China, about 65% more than companies in India and more than twice as much as companies based in the US and Russia.

• BfB research shows that the rising cost of energy threatens up to 1.5M jobs in the energy intensive sector alone, with 363,000 of these jobs being at high risk.

• EU policies currently account for up to 9% of the cost of energy for energy intensive industries.

• Were the UK to opt out of the renewables target alone, energy bills for energy intensive industries could fall by up to 7%.

• Detailed analysis of government impact assessments reveal that, on top of increasing energy prices, EU energy regulations have cost the UK economy between £86.6bn and £93.2bn (net) so far.

• Despite this high cost of this regulatory burden there is little evidence from European Commission (EC) figures that EU rules have significantly promoted cross border trade.

• In 2012–13 alone, the National Health Service spent about £630M on energy.

• Between 2005 and 2012, the gas price index for the EU increased by 35% and the electricity price index increased by 38%. In the US, the gas price fell by 66% and the electricity price fell by 4%, in part to shale gas among other factors.

• Europe’s high energy prices undermine efforts to combat climate change as Europe could become increasingly dependent on imports from other countries, countries which do not comply with the same high environmental standards that European firms do.

• Half of the UK power stations earmarked for closure in  2020 have been forced to close because of the demands of the EU’s Large Combustion Directive (2001/80/EC). This is estimated to cost the UK 11GW in capacity, raising serious concerns about security of supply.

• Up to 38% of British manufacturers, who are much more dependent on energy than other business sectors, believe that the costs of EU membership outweigh the benefits.

• The prime minister has put the cost of the EU renewable’s target as an additional £9bn per year on UK energy bills in 2030 and has called upon the EC to simplify “the existent targets regime from three targets to one”.

Read the full report here​.

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