Brussels must consider fundamental energy policy changes to prevent a mass exodus of industrial players, according to speakers at a conference held at London’s Chatham House on Monday.
Rob Franklin, president of gas and power marketing at ExxonMobil, criticised EU energy policy implemented in recent years, which he noted favoured an overly interventionist approach by governments.
“The most effective energy policies are the ones that are transparent, predictable and based on cost benefit analysis. Importantly, policies [should] allow market prices and open competition to determine the solutions,” said Franklin.
“The EU’s policy approach, which has favoured government-mandated solutions, has undermined the goals themselves,” Franklin added.
European industry has suffered recently in comparison with the United States, where energy-intensive players have benefited from rock-bottom gas prices as a result of the North American shale gas revolution. While it remains to be seen whether Europe can make full use of its shale resource, it seems likely the impact from domestic production will be slight.
Some companies are suffering as a result of EU policy. German chemicals company BASF – which traditionally invests two thirds of its expenditure in its home country – recently said it would be investing more outside Germany than domestically over the next five years.
“Europe should be asking itself serious questions about the viability of its manufacturing base as the foundation of that base continues to erode,” another speaker said under the Chatham House rule.