Joint Statement: Energy-Intensive Industries – Calls for cap on network tariffs

Energy-intensive industries (EIIs) form the backbone of critical and strategic value chains that underpin the EU economy and society, including transport, construction, power generation, batteries, semiconductors, and defence. They are indispensable to the energy and digital transitions, to industrial decarbonisation, to addressing the housing crisis, and to safeguarding the EU's strategic autonomy. In the EU, EIIs represent a turnover of over 1.5 trillion € and around 6.6 million direct employees.

Competitive and predictable access to clean electricity is a prerequisite for securing the future of Europe's energy-intensive industries. The Clean Industrial Deal State Aid Framework provides a clear key performance indicator in this regard: 50€/MWh. Under current global market conditions, a KPI of 50€/MWh should be a maximum of total electricity costs for industry, not just the wholesale price.

However, the EU's industrial base faces an existential crisis due to still high electricity prices and increasing system costs. Several European countries (such as Germany, Ireland, Poland etc.) are notably already experiencing sharp increases in network tariffs. This upward trajectory is expected to intensify across the continent as Europe accelerates its transition to a decarbonized economy, requiring nearly €1.2 trillion in grid

modernization and expansion by 20501. The rising grid costs - a growing component of the industrial electricity bill - are becoming a structural burden for EU's energy-intensive industries, directly undermining their global competitiveness by contributing to keeping European industrial electricity costs significantly higher than those in neighbouring and competing markets.

In addition, energy-intensive industries must optimize their processes for maximum energy efficiency, which often limits their technical and commercial ability to provide flexibility to the grid. The adoption of new dynamic tariff methodologies should not penalise baseload industries for their consumption during peak periods, as they provide stability to the system and have a noticeably higher utilisation rate of grid assets than other consumer groups, thus contributing to grid efficiency and limiting the need for additional grid investments. The closure of industrial stable consumption would increase RES curtailment (for instance, the loss of 500 MW of industrial baseload during periods with high RES-E generation could cause about 130 GWh additional curtailment2) and lead to higher network charges for the rest of consumers.

Though an optimized and modernised European electricity grid is essential to delivering clean electricity supply, policy must ensure that rising costs resulting from grid upgrades do not translate into higher network tariffs for our industries, adding to their energy cost burden and compromising their ability to compete. While various effective options can help reduce the impact of higher grid costs for industrial consumers, a harmonized EU framework for network tariffs is essential for preserving the integrity of the Single Market by removing widening tariff disparities between Member States.

Therefore, we call on EU decision-makers to introduce a cap on network tariffs for energy-intensive industries, mirroring the similar cap for power producers set by Commission Regulation 838/2010 annex part B3. Consistent with the provisions currently applicable to power generators, the average network tariffs in every Member State should remain within a certain range, for instance of 0 to 1.2 EUR/MWh.

As the EU legislation already recognizes that wide variations in grid charges for power generators undermine and fragment the internal market, the same logic must apply to energy-intensive consumers. Implementing the cap would help preserving the level playing field in the internal market, while providing energy-intensive industries with the cost predictability and certainty needed to support investment decisions and to continue their decarbonization journey. The cap can be implemented without compromising the financial integrity of grid operators and it provides them with revenue certainty leaving them less exposed to abrupt tariff reduction decisions.

But more importantly, the €1.2 trillion EU grid investments will require a financial strategy going beyond tariff-based recovery and based on a mix of private financial instruments and EU funds. In this regard, the Clean Energy Investment Strategy and the Commission's proposal to increase the Connecting Europe Facility (CEF) budget by over five times in the next MFF period are steps in the right direction.

We are convinced this solution will contribute to restoring European industry's competitiveness and we remain available to discuss the details with all involved decision makers to ensure its swift implementation.