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18 October 2022

Will the energy crisis crush European industry?

As European businesses brace for energy shortages, workers at one plant in south-eastern France are getting a new winter wardrobe.

Saint-Gobain, the French building materials group, has ordered extra-warm coats and gloves for staff at its warehouse in the Alpine town of Chambéry, who have agreed to turn down the heat this winter. In order to cut gas consumption, temperatures will be closer to 8C, instead of the usual 15C.

“It will be just like working outside so we have to give them all the tools to work in an outside environment,” says Benoit d'Iribarne, senior vice-president of manufacturing.

Turning down the thermostat is no mere cost saving for many of Europe's industrial companies as they dig in for a hard winter. With energy prices soaring to unprecedented highs after Russia's invasion of Ukraine, it has become a matter of survival.

Europe's industrial base employs some 35mn people or roughly 15 per cent of the working population. The bloc's leading industrialists warned earlier this month about the potentially devastating economic impact of the energy crisis.

“Soaring energy prices are currently precipitating an alarming decline in the competitiveness of Europe's industrial energy consumers,” said the European Round Table for Industry in a letter to Ursula von der Leyen, president of the European Commission, and Charles Michel, head of the European Council. Without immediate action to cap prices for energy-intensive companies, “the damage will be irreparable”.

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