The call by energy minister (déi Gréng) to in order to avoid a tough winter due to a possible closure of the Russian gas supply was not to industry federation Fedil's liking. It insists that the industry does not waste gas and that production processes are already optimised to consume as little energy as possible while producing more. “Energy is too expensive for the industry to waste. Between 2017 and 2019, the five largest industrial energy consumers in Luxembourg active in the steel, glass, cement and rubber sectors managed to reduce their energy consumption, equivalent to the annual consumption of the cities of Ettelbruck and Diekirch. And this in a period of growth,” emphasises Gaston Trauffler, head of industrial policy at Fedil.
If an industry is not functioning, employees will not be able to go to work and short-time working will have to be introduced.
Fedil considers that stopping or reducing industrial production to consume less is too simplistic of a solution.
“This is what we want to avoid at all costs. It is easy enough to say that if you stop production in an industry, you solve the problem of gas consumption. If an industry is not functioning, employees will not be able to go to work and short-time working will have to be introduced. Then, if there is no production, shortages will appear on the markets and prices will rise. Imagine the consequences for the construction and real estate sector if the cement sector is shut down. A large number of building sites will be at a standstill, with a multiplier effect on all adjacent trades, not to mention the indirect consequences, particularly on prices,” says Trauffler.
During his speech, Turmes also warned that in the event of a major gas crisis, the industrial sector would be the first to be deprived of gas in order to protect households and priority infrastructures, such as hospitals.
“The minister has said what needs to be said. Obviously, households and critical infrastructure should not be left out in the cold. Only industry can reduce gas consumption, but we must not pit industry against the rest of the population. It is a societal issue where the whole of society must make an effort,” says the Fedil expert.
Luxembourg relatively protected
The share of Russian gas in Luxembourg's energy mix is about 13%. But Luxembourg is fortunate to be connected to the Belux market. Thanks to the port of Zeebrugge, 80 terawatt hours of gas arrive annually from Norway and the United Kingdom. Belgium consumes around 40 terawatt hours annually and Luxembourg consumes around 2.5 terawatt hours. “The consumption capacity of Belgium and Luxembourg is not high enough to consume all the gas arriving via Zeebrugge. It would therefore be very unlikely that there would be a gas shortage in Luxembourg and Belgium,” says Trauffler.
On the other hand, the energy risk could come from Germany, which supplies a large part of Luxembourg's electricity.
It should be noted, however, that Luxembourg has a gas reserve equivalent to 15% of its needs, stored by Encevo in Rhineland-Palatinate.
The alternative is the electrification of heat. This is possible in a large number of cases.
To deal with the worst-case scenario, the energy ministry, the European Union and Fedil are working together to draw up plans to handle a sudden cut-off of Russian gas. “It's always very tricky to start developing a plan to say that one industry is more important than another because the value chains are so interconnected and interdependent. We don't support this prioritisation approach. We are more in favour of the German approach, which is based on gas volume quotas per country according to a solidarity system. The countries should then decide how to distribute this volume to the various consumers,” says Trauffler.
Reducing administrative red tape and delays
In the long term, Luxembourg industry could definitely do without gas. But it is still necessary to speed up investment and infrastructure, while reducing red tape within public administrations.
“Going without gas is desirable in the long term. The will and investments of industrialists to move rapidly towards alternatives are real, but the public administrations must follow suit by issuing authorisations rapidly, by putting in place short decision-making circuits,” stated Fedil.
This story was first published in French on . It has been translated and edited for Delano.