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Austrian Industry Requires Government Support
Date:2024-11-28 13:37:25View:85Tags:Ronsco

Energy-intensive industries face significant challenges that demand governmental action to establish sustainable, market-driven business models, according to Herbert Eibensteiner, CEO of Austrian steel giant voestalpine.

Eibensteiner highlighted that these industries are under pressure both to transform their own operations and to meet growing demands from their customers.

Voestalpine's Climate-Neutral Transition
Voestalpine has already embarked on a path toward climate-neutral steel production. The company’s landmark initiative, voestalpine greentec steel, represents Austria's largest industrial climate protection program, with initial investments in the billions of euros. This program is enabling the company to expand its range of green steel products.

However, Eibensteiner emphasized that the existing policy framework is insufficient to support global and European competitiveness for such ambitious projects.

Regulatory and Policy Challenges
The CEO raised concerns about increasingly stringent emission reduction targets, which he described as unrealistic and threatening to the survival of energy-intensive industries and their associated value chains. Excessive regulatory measures exacerbate these challenges.

In the EU alone, approximately 13,000 new regulations were adopted during the last legislative period, with over 900 added in Austria. These regulations often translate into globally uncompetitive labor costs and unresolved issues surrounding the availability and affordability of green energy, such as industrial-scale green electricity and renewable gases.

Eibensteiner also criticized Austria’s tendency to overcomply with EU goals and norms, known as "gold-plating," and the country’s political gridlock, which has hindered the creation of effective mechanisms to support the industrial transition and counter competitive disadvantages within the bloc.

The Need for Strategic Action
With ongoing government negotiations and the formation of the new European Commission, Eibensteiner sees this as a pivotal moment for energy-intensive industries. He called for the implementation of a Clean Industry Agreement, aimed at reconciling climate goals with industrial competitiveness. He also urged the European Commission to adopt proposals from the Draghi report, particularly regarding the critical review of free ETS allowance phase-outs during the introduction of the Carbon Border Adjustment Mechanism (CBAM).

Proposed Priority Measures
To address these challenges, Eibensteiner outlined several priority measures:

Lowering non-wage labor costs to improve competitiveness.
Restoring energy price compensations within the EU, suspending renewable energy surcharges, and addressing issues like Germany’s gas storage tax.
Avoiding overly ambitious 2040 emission targets and critically reviewing the CBAM’s impact.
Reducing bureaucracy to streamline industrial operations.
Establishing a dedicated Austrian Ministry for Industry with the authority to support industrial growth and competitiveness.
Strengthening Austria's active role in the EU to influence policy through the European Council and Parliament.


Industry-Wide Implications
EUROFER, the European Steel Association, echoed Eibensteiner’s concerns, warning that delays in implementing the EU Clean Industry Agreement could endanger value chains across the bloc. A robust action plan is urgently required to secure the future of the steel industry and other energy-intensive sectors.

The message from Eibensteiner and industry leaders is clear: without decisive policy support, Austria’s energy-intensive industries risk losing their competitive edge, threatening economic stability and progress toward climate goals.

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