High electricity prices continue to undermine competitiveness of Europe

While the previous decline trend in EU industrial electricity demand seems to have stabilised, there is still significant uncertainty surrounding the electricity demand recovery in European industries. Electricity prices remain above pre-crisis levels for energy-intensive industries, which are also higher than in most competing regions. At the same time, domestic demand for many industrial products remains weak. Nevertheless, slight increases in primary metal and chemical production were observed in 2024. The extent of the recovery in these sectors is uncertain, however, as negative business sentiment is prevalent across multiple countries, with many companies experiencing difficulties. In addition to energy-intensive industries, among leading manufacturing sectors, the automotive industry is increasingly coming under pressure from weakening domestic demand and growing competition in export markets.

After easing in 2023, preliminary data for 2024 shows that average electricity prices for energy-intensive industries in the EU decreased only by 5% compared to the previous year and are still 65% higher than in 2019. Despite declining from the record highs in 2022 and slightly lower compared to 2023, electricity prices for energy-intensive industries in the European Union in 2024 were, on average, still double those in the United States and 50% higher than in China.