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How is the gas crisis affecting the textile industry? | Recovo

© Image courtesy of Euratex

 

Kremlin press secretary Dmitry Peskov announced last week that Russia will no longer ship gas to Europe as long as sanctions triggered by the Ukraine war remain in place. The cuts have led to unprecedented gas and electricity prices in Europe, exacerbating an energy crisis that began late last year with soaring power, gas and oil prices.

What do rising gas prices mean for the textile industry?

For the textile industry, the news adds to the uncertainty created by rising light, oil and raw material prices and fears of an impending recession. Further cost increases in the production chain could be an insurmountable impact for the energy-intensive European textile industry, especially in spinning, dyeing and finishing, and the inability to pass these costs on to customers would otherwise reduce Europe’s competitiveness in the international market.

This has already led to capacity reductions and production stoppages. Closures and the relocation of production outside Europe are expected if the current situation persists, leading to further deindustrialization of the continent and increased dependence on external suppliers.

Some specific segments of the textile industry are particularly vulnerable. The man-made, synthetic and cellulose-based fiber industry, for example, is an energy-intensive sector and a major consumer of natural gas in manufacturing. The disappearance of European fiber products would have immediate consequences for the textile industry and for society as a whole. Textile dyeing and finishing are also relatively energy-intensive activities and are essential in the textile value chain, adding value to textiles and garments through special dyes and functions.

 

Measures demanded by textile and fashion towards the European authorities

That is why Euratex, the Brussels-based organization representing some 154,000 textile and clothing companies in the EU, is calling for a common European strategy to tackle the current energy crisis. Euratex proposes to the European authorities to revise the electricity price mechanism and to set a maximum gas price of €80 per megawatt hour in the EU. On the other hand, it also sees the need for special assistance to companies to avoid bankruptcy and the relocation of textile production outside Europe.

“Governments must ensure that critical industries such as textiles and all its segments can secure gas and electricity contracts towards the end of the year at an affordable price,” says Euratex. “A stable and predictable energy supply is of paramount importance. Gas restrictions and rationing should only be used as a last resort, and no mandatory consumption cuts should be envisaged.”

In addition to the measures under discussion, Euratex said there has been an increase in conflicting and uncoordinated national responses to the energy crisis. This has resulted in a chaotic political and regulatory environment, putting additional pressure on a fully integrated supply chain at the European level. It is therefore important to take steps to ensure a level playing field in the EU.

“A scenario in which entire segments of the textile industry disappear can no longer be ruled out” says Euratex President Alberto Paccanelli. “This will lead to the loss of thousands of European companies and tens of thousands of jobs, and will further increase Europe’s dependence on the outside for essential goods.” Paccanelli emphasized that this applies specifically to SMEs, which need temporary support measures such as state aid, tax breaks and energy price caps, to cope with the current crisis and prepare for a long-term green transition.

One way to combat the rising prices of newly produced fabrics is to reuse existing materials. In Recovo you can find in our catalog fabrics that contribute to reduce textile waste and the environmental impact of fashion. You can also try to sell your leftover fabrics, maybe someone is looking for them!

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