The European Union (EU) seed crushers and oil processors’ federation (FEDIOL) has issued a statement raising its concerns over the cost and availability of gas and electricity, calling for options to ease pressure to maintain domestic vegetable oil and protein meal production.
The organisation said it had welcomed the EU’s Save Gas for a Safe Winter package approved by the EU Energy Council earlier this year, which would involve EU member states reducing gas demand by 15% this winter as part of a comprehensive set of measures to accelerate energy savings and transition towards reduced dependence on Russian gas.
However, in its statement issued on 8 September – the day before an extraordinary EU Energy Council meeting to discuss further action in the energy markets at European and national level was due to be held – the organisation said further action was needed.
“Pending clarity on national implementation of the Save Gas for Safe Winter package, disruption to the gas supply could indeed be a concern for food and feed business operators and would entail a serious risk of food and feed shortages,” FEDIOL said.
“European food business operators are experiencing up to twelve-fold price increases to source energy from gas and electricity, compared to [the] pre-war situation. These developments are the reason for high production costs for EU manufacturers of vegetable oils and meals.”
Key oilseed processing regions outside Europe had seen their energy costs “only” doubling during the same period and they were not exposed to carbon prices, the organisation said.
“Expansion of crush capacity in these regions goes at the expense of EU crush and increases third country dependency, which will make supplies of food and feed more vulnerable,” FEDIOL added.
“The fact that prices of raw materials for production of vegetable oils and meals have returned to pre-Ukraine war levels, following recovered supplies from Ukraine and availability of EU harvested crops, is adding to the strains felt by food chain actors in trying to navigate through difficult times and maintain their activity.”
FEDIOL said European operators in the sector remained committed to continue improving the energy efficiency of their operations, find energy savings and encourage the use of renewables as a source for heat and power generation.
“However, the increase of cost differentials is affecting the EU industry’s competitiveness and, hence, long-term investments in Europe face a serious reality check.”