Pieter Cleppe
By 2025, natural gas prices in Europe are expected to be five times higher than in the United States. This will make it very difficult for energy-intensive industries to compete.
One explanation for the difference in energy prices is the U.S. fracking revolution. According to some estimates, Europe has significant reserves of extractable shale gas. But there is a de facto ban on shale gas development in Europe, which does not prevent European countries from importing the same (and expensive) gas from the U.S.
A second explanation is the European Union’s Emissions Trading Scheme (ETS), which functions as a de facto climate tax. This tax is so high that it exceeds the entire price of natural gas in the United States.
One might expect that there would be strong political pressure to do something about the situation, for instance by mitigating the ETS climate tax or considering shale gas extraction. On the contrary, the EU decided last year to extend the scope of the European climate tax to more sectors, which will make heating with gas or driving a diesel car even more expensive for consumers.
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