Home » Engie is alarmed by a sharp drop in gas consumption by European manufacturers – 2022-09-27 at 13:40

Engie is alarmed by a sharp drop in gas consumption by European manufacturers – 2022-09-27 at 13:40

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An Engie logo during the Viva Technology conference at the Porte de Versailles exhibition center

PARIS (Reuters) – The gas consumption of the most energy-intensive companies in Europe has fallen by nearly 30% since the start of the crisis in Ukraine, a sign that manufacturers have massively reduced their production, the Chairman of the Board of Directors of Engie.

Jean-Pierre Clamadieu called for the establishment of mechanisms to regulate energy prices.

“When we look at the gas-intensives which are connected to the European transport network, we now estimate the reductions in consumption at around 30%”, he said during a conference organized by the French Association of gas.

“It means that major consumers, steelmakers, glassmakers, all those for whom gas is an essential element of the process, have asked themselves the question of whether or not to continue producing and some of them have decided to stop. And that is really a point of attention”, he added, specifying that the competitiveness of Europe was at stake.

“We will no doubt be able to get through the winter without a forced reduction in consumption, but because we have seen these massive reductions on the industrial side and because we are convinced that households will indeed be able to also, to make an effort to reduce consumption”, he continued.

Many manufacturers in Europe have decided to reduce their production in the face of soaring energy prices.

Aluminum Dunkerque, for example, the largest producer of primary aluminum in France, plans to reduce its production by 22% in the fourth quarter.

ArcelorMittal, for its part, forecasts a drop in its steel production of 1.5 million tonnes in the fourth quarter of 2022 in Europe compared to the previous year.

For Jean-Pierre Clamadieu, it is urgent to find a solution to calm prices on the markets, which do not reflect, according to him, the risks which weigh on gas, even if this measure is “regulatory”.

In particular, he calls for a cap on the price of gas at European level, a proposal which has not yet found consensus within the European Commission.

Nor does it have the favor of Patrick Pouyanné, Chairman and CEO of Totalenergies, invited to speak at the same round table.

“Gas is a global market. LNG (liquefied natural gas) comes to Europe because Europeans are willing to pay a bit more for it than Asians, otherwise US LNG goes to Asia,” he said.

“So putting a ‘cap’ on the European gas market when basically we have to bring in more gas is a concept that escapes me,” he continued.

European Union energy ministers will meet again on September 30 to find common solutions to the energy crisis.

(Report Caroline Pailliez, edited by Jean-Stéphane Brosse)

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