WRITTEN QUESTION E-0601/96 by Christof Tannert (PSE) to the Commission (13 March 1996)

Subject: Energy costs

1. Can the Commission state the average proportion of production costs accounted for by energy costs in the European Union?

2. What proportion of production costs is accounted for by electrical energy costs?

3. What is the average level of energy costs in the EU in the following sectors:

- cement production

- aluminium production

- steel production

- the textile industry

- agriculture

4. Can the Commission provide answers - approximate if necessary - to the questions listed above in relation to Poland or another third country linked to the EU by a Europe agreement?

Answer given by Mr Papoutsis on behalf of the Commission (28 May 1996)

1. The proportionate share of energy costs in industrial output in the Community was estimated at slightly over 2% in 1992. This does not include the energy proportion of the transport costs of the industrial sector, which come under the transport sector in the statistical system.

2. Electricity costs account for an average proportionate share in industrial output of some 1.5%.

3. a) The European cement industry has calculated that energy costs in cement production represent between 30 and 40% of the total production costs. However, this varies according to the size of the cement plant and the type of fuels used. Alternative fuels will be used more and more in this sector and thus help to reduce energy costs.

b) In 1994 the cost of electricity was approximately 26% of the total operational costs for aluminium production in the Western world. In the Community, the proportion of energy costs varies from one Member State to another. In 1994 this was between 20 and 35% of the total operational costs. Due to significant hydraulic resources, the figure for Northern Europe is below 20%.

c) When considering the iron and steel industry, it is important to make a distinction between energy required for initial production of the metal and energy required for secondary melting (e.g. in the foundry industry when making speciality steels).

The total energy consumption of the Community iron and steel industry was 51 million tonnes oil equivalent in 1993, which was 20.4% of the total industrial energy consumption. ((Source: Eurostat. )) The proportion of energy costs in total production costs is estimated at between 18 and 23%.

d) Energy costs in the cost structure in the textile and clothing sector vary according to the sub-sectors involved and can be as much as 12% of the total costs in the textile finishing sub-sector, which is the sector that consumes the most energy. In the spinning sector, this cost is around 2 or 3%, whilst in the clothing sector it is negligible.

e) As regards agriculture, the cost of energy (including lubricants) represents 11% of intermediary consumption.

4. The comparative figures for industries in third countries with association agreements with the Community are difficult to find. The issue of energy prices is one of the key factors of industrial competitiveness and thus prices paid are extremely commercially sensitive.

However, aluminium production costs, together with the cost of energy used in such production, were higher in Eastern countries in 1994 than in the Community. In Poland, in particular, the cost of electricity accounted for about 40% of the total operational costs.