Amid a six-month programme of national consultations commissioned by the French government to help define the country’s future energy policies, a conference organised by two leading business organizations in central Paris on May 17th provided a platform for company bosses to voice their resolute view that energy transition strategies should first and foremost be concerned with industrial competitiveness.
The Friday morning conference, entitled ‘Energy challenges and business competitiveness’, was staged by the L’association française des entreprises privées (Afep), an association that represents most of France’s largest corporations, and the Cercle d’Industrie, a lobbying group for French industrial leaders which is headed by PSA Peugeot-Citroën boss Philippe Varin.
The participants represent a powerful group in the ongoing debates ahead of a new energy bill the government is due to present before parliament this year, as testified by the presence of environment and energy minister Delphine Batho, one of the few women present among the sea of grey suits and white hair.
In a process launched last autumn, the government has engaged a series of debates among a wide range of participants, structured into seven ‘colleges’, and who include energy experts, business representatives, trades unions officials, environmentalist groups and political figures. The conclusions will provide the basis for the new energy bill.
Friday’s conference was independent of the formal consultation process. The tone was set in a written presentation by the organizers which demanded that “growth and employment must be the principle criteria of decision-making,” adding that “the support for industrial competitiveness must be a priority”. But the speakers began by paying lip service to the importance of combating the causes of climate change.
“Those who think that companies are climato-sceptic [sic] are wrong,” said Jean-Pierre Clamadieu, president of the sustainable development commission of the broad French business federation the Medef. “The reduction of CO2 emissions is at the heart of our strategies.”
As the heads of France’s large corporations took to the stage one after the other during the four hours of debates, not one of them attempted to deny the role of human activity in causing climate change (although energy and transport corporation Alstom, whose CEO was present, supports the ‘Ecology of the Future Foundation’ one leading member of which is scientific researcher and former minister Claude Allègre, an outspoken sceptic of the human influence on climate change).
For Gérard Mestrallet, Chairman and CEO of French energy giant GDF Suez, the world is entering a historic moment of change. “The old world, with ever-larger energy plants, is steadily disappearing,” he told the audience. “It is making way to new forms of production and consumption – digitalisation, smart metres, smart grids, storage, energy efficiency, fall in demand. We have to become suppliers of energy solutions. This evolution is irreversible.”
But while each speaker cited fighting climate change as figuring among their preoccupations, it was nevertheless apparently subservient to the mother of all battles, that of economic competitiveness. “Competitivity must be the priority, not secondary,” declared Bruno Lafont, managing director of building materials manufacturer Lafarge, the world’s biggest cement producer.
GDF Suez’s Gérard Mestrallet described the European Union’s programme for reducing greenhouse gases and for the encouragement of renewable energies as “a triple failure”. Pierre Gadonneix, former chairman of utility giant EDF, now chairman of the World Energy Council agreed. “Europe presented itself as the champion in the fight against climate change, with the fall in its CO2 emissions, whereas today this policy shows signs of weakness and even marginalization compared to the rest of the world,” he said. This even found approbation from Éric Mamer, the deputy chief-of-staff to EU Commissioner for Energy, Günther Oettinger. “The European energy summit on May 22 will show that the debate is moving elsewhere,” Mamer told the conference. “Competitivity and security of supply are at the heart of the discussions.”
'Massive evolution by 2025 is an illusion'
The attendant French company bosses were fiercely critical of Germany’s energy transition programme Energiewende, under which gas and renewable energies are to provide an alternative to the phasing out of CO2-polluting sources and nuclear power, which they judged to be too rapid and costly. “Energy is for Germany what the 35-hour week is for France,” commented Alstom CEO Patrick Kron, referring to the continuing controversy over the reduction in standard French weekly working hours introduced by a socialist government in 2000 and bitterly contested by the business world. “We must be realistic in the objectives that we give ourselves,”commented the Medef’s Jean-Pierre Clamadieu, adding: “Germany is not a model.”
There was however broad support for the development in the US of shale oil and gas production extracted through the controversial process of hydraulic fracturing, or fracking, a method currently banned in Franceto the dismay of energy companies. GDF Suez’s Gérard Mestrallet took the opportunity to present his company’s joint involvement in the building of a plant in Louisiana to produce liquefied shale gas.
The conference’s collective championing of the need to make industrial competitiveness the priority consideration of energy policies, and support of the introduction of fracking in France, was contained in a series of propositions submitted last month by a ‘contact group’ of 30 French companies, principally from the energy sector, as part of the government-commissioned consultations on energy transition policies that began last autumn.
While President François Hollande has made clear his opposition to shale oil and gas extraction for as long as there is no alternative method to that of hydraulic fracturing, the contact group’s propositions included the suggestion that the “national potential” of shale gas extraction should be considered “within conditions that are respectful of the environment”. While that led to an outcry from environmental protection NGOs, at Friday’s conference the organizers, the Afep and the Cercle de l’Industrie, went boldly further. “Non-conventional energy sources, such as shale gas, should be considered as a major element for competitivity,” they wrote in a joint presentation. By implication, environmental concerns were secondary. “A principle should be established that the public powers remain technologically neutral: no option must be blocked, neither today nor in the long term.” It added that the “principle issue at stake will be the readjustment of the European Union’s energy and climate policies in favour of the competitiveness – internal and external – of European businesses.”
“The energy scenario, or scenarios, that have the most favourable effects on growth and employment must be selected,” it added.
The tone of that message appeared to conveniently brush aside recent measures to encourage industrial competitiveness at the expense of environmental concerns, such as the relaxing of the EU’s regulations concerning carbon credits or the softening of the European Commission’s Eco Design Directive, not to mention, at another level, the French government’s granting last November of 20 billion euros-worth of tax breaks to businesses. “It’s not [a question of] one particular measure, it’s about a whole number of things, to integrate the issue of competitiveness into each decision taken,” argued GDF Suez’s Gérard Mestrallet.
While environment and energy minister Delphine Batho, present throughout the conference, called for an “ecological New Deal”, the business lobby’s demands clearly threatened the braver ambitions of the current energy transition debate in France. “It is an illusion to imagine a massive evolution between now and 2025,” said the Medef’s Jean-Pierre Clamadieu, referring to the government’s target for a significant change in the energy mix, notably the reduction of the share of nuclear power in electricity production from 75% to 50%. Surprisingly, while the Medef supports moves for greater energy efficiency, it argues for moderation regarding the expansion of renewable energies, and this despite the fact they are under development by every major energy company.
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English version by Graham Tearse