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3.2The threat to jobs from high energy pricesBy taking the employee numbers in each industry and by highlighting those who are in directemployment, we can calculate the number of people whose jobs are likely to be directlyaffected by rising energy costs and those whose careers risk being severely disrupted:Table 3: EII Employee numbersIndustryTotal employee numbersTotal number of people indirect employment (High risk)Metals 471,000 62,000Chemicals and chemical products 600,000 214,000Paper and paper products 100,000 25,000Mineral extraction 158,000 35,000Glass products 157,000 7,000Ceramics and cement 40,000 20,000Total 1,526,000 363,000It is important to stress that the EU policy is not the sole factor behind rising energy costsand that it is far from clear what the final impact of high energy costs will be on employmentin Energy Intensive Industries. However what is clear is that job losses in EIIs are alreadymounting and that there is evidence that the EU is playing a growing role in driving up theenergy costs these firms face.3.3Manufacturing companies are leaving the EU“In the longer run I can only see the situation getting worse. We are competingagainst countries with far lower energy costs. How are we to compete in aglobal market if organisations such as the EU seek to impose more and morecosts onto companies?”- Owner of a medium-sized manufacturing business based in the East MidlandsDespite the large amount of evidence cited above which suggests that European firms areeither considering leaving the EU for areas with cheaper energy, or are having to close down,there is little acknowledgement of this problem by the EU. A recent study by the EuropeanCommission even argued that there was no evidence for carbon leakage (i.e. industry leavingthe EU for countries with lower carbon emissions targets). This was based however on a verynarrow criteria (it examined whether the ETS was the sole driver of carbon leakage) and infact the report acknowledged that:Energy Policyand the EU38
“Energy discussions play a major role in the overall situation for industry andare always on the background of carbon leakage discussions. Be it cheapshale gas in the US and Middle East or subsidised coal in China, the impact ofenergy prices is real.”- Carbon Leakage Evidence Project 129In addition, numerous commentators from both business and beyond have warned that EUpolicies are contributing to the closure of businesses. The International Energy Association’schief economist recently warned that Europe’s high gas prices risked driving away a bigshare of its Energy Intensive Industries such as cement and steel: “These industries arecritical for the European economy as they employ over 30 million people and it could havea major knock on effect on the European Union economy”. 130Any estimate of the exact number of firms who have left the EU because of expensiveenergy are unlikely to be satisfactory. There are several reasons why a firm may chooseto leave the EU, including a desire to tap into the national resources of other countries. 131Attempts to calculate the relative importance of energy prices in any firm’s investmentdecisions is incredibly difficult. At the same time the Commission’s attempts to mitigateagainst carbon leakage via a host of different rules and allowances produces a very complexset of circumstances, with each different sector affected differently by new and existing EUlaws. It is very hard to find a situation in which firms identify high energy costs as the solereason for closing down their facilities (and even harder to find situations in which onespecific policy is blamed for the decision to move facilities).However it is possible to see incidents where individual EU laws are named as overwhelmingreasons for the decision to close a facility. 132 It is also possible to identify cases of firms havingto close or to move onto other areas as a result of high energy costs. CIVITAS looked intoincidents of carbon leakage in the UK and pointed out that in 2003 Britannia Zinc near Bristolwas closed (with a loss of 400 jobs) and in 2006 EIUG warned that the gas price spike hadcontributed to 6,000 job losses in the glass sector. 133 Beyond the UK a similar pattern can beseen elsewhere in Europe, in 2013 BMW announced that it was moving its manufacturingfacilities to the US to benefit from the cheaper energy. 134129 Ecorys, Carbon Leakage Evidence Project, p.11, 23 September 2013, found at 130 International Energy Agency, World Energy Outlook, found at 131 More information provided by Oxford University, see D. Buchan, Costs, competitiveness and climate policy: distortionsacross Europe, p.5, April 2014, found at 132 RWE, Report on the first half of 2013, p. 10, found at 133 CIVITAS, Lea and Nicholson, British Energy Policy, p.11, June 2010, found at 134 C. Bryant, “High European energy prices drive BMW to US”, Financial Times, 27 May 2013, found at 39
Page 2: Business for Britain exists to give
Page 9: In a recent letter to the President
Page 14 and 15: in the US. While this would be conc
Page 16 and 17: This divergence is not confined to
Page 18 and 19: Commission has itself acknowledged
Page 20 and 21: 2.4The rising costs of EU energy re
Page 22 and 23: It is important to note that many o
Page 24 and 25: 3.1The impact of high energy costs
Page 26 and 27: MetalsTOTAL UK EMPLOYMENT471,000 in
Page 28: Chemicals and chemical productsTOTA
Page 31 and 32: INDUSTRY CASE STUDY 3.1.3Figure 14:
Page 37: INDUSTRY CASE STUDY 3.1.6Figure 21:
Page 41 and 42: were also closing faster than expec
Page 43 and 44: Increased energy dependence3.6Anoth
Page 45 and 46: Despite these problems, the EU’s
Page 47 and 48: 41 per cent of British manufacturer
Page 49 and 50: genuine, efficient and effective in
Page 51 and 52: The EU should also make it clear th
Page 53 and 54: should be considered: were the UK t
Page 55 and 56: Conclusion5The EU’s energy policy
Page 57 and 58: Table 8: All energy Impact Assessme
Page 59 and 60: IA TitleImpact Assessment: Amendmen
Page 61: “Energy Policy and the EU is a ti

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