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Textilegence November December 2022 issue has been published

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TopicalEuropean textile sector on alert against energy crisis

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The fact that natural gas and electricity prices have reached unprecedented levels in Europe with the war with Russia and Ukraine seriously affects the European textile industry, where energy is used intensively, especially in yarn, dyeing and finishing. European textiles and fashion, represented by EURATEX, call for a single European strategy to tackle the energy crisis. In this context, it is pointed out that in order to secure the future of the sector, the electricity price mechanism should be reviewed and an upper limit of €80/MWh should be imposed on gas prices across the EU. In addition, it is stated that private company aid should be provided to prevent bankruptcies and the relocation of textile production outside of Europe.

Production may shift out of Europe and closures may occur if no action is taken

Expressing that it is impossible to pass these cost increases to customers due to the severe global competition in the market that characterizes the European textile and clothing industry, EURATEX says that this 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 the continent and increased dependency on external suppliers.

Remarking that certain segments of the textile industry are particularly vulnerable and that 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, it is underlined that the disappearance of European fibre products would have immediate consequences for the textile industry and for society at large. It is stated that activities of textile dyeing and finishing are also relatively intensive in energy and these activities are essential in the textile value chain in order to give the textile products and garments added value through colour and special functionalities, such as medical applications.

European textile sector on alert against energy crisis

The steps to be taken in this context are explained as follows: Governments should ensure that critical industries, such as textiles and all its segments, are able to ensure gas and electricity contracts towards the end of the year at an affordable price. A 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.

National initiatives conflicting lead to the de facto fragmentation of the Single Market

In addition to these discussed measures, EURATEX notes that they are currently observing a proliferation of contradictory, uncoordinated national initiatives to tackle the energy crisis, leading to the de facto fragmentation of the Single Market, resulting in a further strain on the fully integrated supply chain at a European level. EURATEX also underlines the importance of measures that ensure a level playing field in the EU.

“A scenario where entire segments of the textiles industry will disappear can no longer be excluded”

EURATEX President Alberto Paccanelli, considering the current situation, stated that a scenario where entire segments of the textiles industry will disappear can no longer be excluded. He said: “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 on foreign sources of essential goods.” Paccanelli underlined that this applies specifically to SMEs who need temporary support measures such as state aid, tax relief and energy price caps to survive the current crisis and prepare for the green transition in the longer run.

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