Energy crisis threatens EU textile sector

BRUSSELS – The European textile industry is facing extinction if the EU does not step into to protect manufacturers against soaring energy prices. This is the stark warning of EURATEX, the European textile industry trade body, which has called for a single European strategy to tackle the energy crisis. It claims a revision of the electricity price mechanism is necessary, and has asked the EU for a cap on gas prices at 80€/MWh to “safeguard the future of the industry.” In a statement it added: “Special company support needs to be granted to avoid bankruptcy and relocation of textile production outside Europe.”

Gas and electricity prices have reached unprecedented levels in Europe in recent months due to the war in Ukraine. EURATEX has warned that severe global competition in the European textile & clothing industry means that, “these cost increases are impossible to pass on to customers.”

In a statement it said: “[The energy crisis] has already led to capacity reductions and production stops. Closures and the shift of production outside Europe are being forecasted should the current situation persist, leading to further de-industrialization of our continent and increased dependency on external suppliers.”

EURATEX warned that specific segments of the textile industry are particularly vulnerable. It stated: “The man-made fibres (MMF), synthetic and cellulose-based fibres, industry for instance is an energy intensive sector and a major consumer of natural gas in the manufacturing of its fibres. The disappearance of European fibre products would have immediate consequences for the textile industry and for society at large.

“Governments should ensure critical industries, such textiles and all its segments, are able to ensure gas and electricity contracts towards the end of the year at an affordable price. Stable and predictable energy supply is of the utmost importance. Gas restrictions and rationing must only be used as a last resort. No mandatory consumption cuts should be foreseen.

“In addition to measures under discussion, we currently observe a proliferation of contradictory, uncoordinated national initiatives to tackle the energy crisis. This has led to a de facto fragmentation of the Single Market, resulting in a chaotic policy and regulatory environment that adds a further strain on our supply chain, which is fully integrated at European level. Measures that guarantee a level playing field in the EU are utmost important.”

EURATEX president Alberto Paccanelli said: “Given the current situation, a scenario where entire segments of the textiles industry will disappear can no longer be excluded. This would lead to the loss of thousands of companies and tens of thousands of European jobs and would further aggravate the dependency of Europe to foreign sources of essential goods. This applies specifically to SMEs who need temporary support measures (e.g. state aids, tax relieves, energy price cap) to survive the current crisis and to prepare for the green transition in the longer run.”