Energy prices threaten European supply chains

2022/10/21 at 4:05 PM

The functioning of European supply chains is being put at risk by increasing energy prices. There is a significant risk of a collapse of supply chains which rely heavily on rail freight for transportation due to unsustainable energy and transportation costs. ERFA, UIRR and UIP adopted joint statement about measures needed to protect European supply chains from unsustainable Energy price increases

fot. Pixabay

The recently adopted Council Regulation (EU) 2022/1854 on capping energy prices allows Member States to use surplus revenues resulting from the application of the cap on market revenues to finance measures in support of final electricity customers that act in the greater interest of society and the economy.

Rail freight competes with long-distance trucks. The price of diesel fuel used in these trucks increased by 70%, whereas the cost of electricity that powers freight trains has gone up 300- 1000% depending on the Member State. Considering the superior energy efficiency of electric freight trains as compared to long-distance trucks, and the benefits of the resulting very small carbon footprint, the need to designate electric rail freight as a final consumer group to be supported under Regulation (EU) 2022/1854 is essential.

“It must be recognized that rail transport is one of the biggest consumers of electricity in Europe. Rail freight is particularly exposed to increased electricity prices compared to other modes of transportation and the current energy crisis is threatening the existence of the railway sector and their customers. Without further action by the European Institutions and Member States, it is expected that prices for rail freight will experience a significant double digit price increase over the coming weeks. This will undermine Europe‚Äôs modal shift objectives and damage the functioning of critical rail freight supply chains which are dependent on a stable price and supply of electricity” – states the common position of the organizations.

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