Energy-Intensive Industries Warn Government's EUR 600 Million Credit Line Won't Keep Factories Running
Portugal's largest energy consumers have warned that the government's EUR 600 million credit line — announced last week to help businesses cope with soaring energy costs — will not be enough to keep their operations viable. The Portuguese...
Portugal's largest energy consumers have warned that the government's EUR 600 million credit line — announced last week to help businesses cope with soaring energy costs — will not be enough to keep their operations viable. The Portuguese Association of Large Energy Consumers (APIGCEE) told ECO that while any support is welcome, access to credit does not solve the fundamental problem: energy prices that make industrial operations unprofitable.
"Energy prices remain abnormally high and, as such, unsustainable for energy-intensive sectors," the APIGCEE said. "It is not because a company has access to credit that its operation becomes viable or profitable."
Damage Already Done
The association pointed to lasting damage from the Strait of Hormuz crisis, noting that destruction of natural gas production infrastructure means elevated prices will persist even if maritime traffic is restored. The brief dip in prices following last Wednesday's ceasefire between the United States and Iran represented "only a fraction of what went up in recent weeks," the group said.
The warning comes as industries such as steel, glass, ceramics, and chemicals — sectors where energy can account for more than 40 per cent of production costs — face a competitive squeeze that the APIGCEE says predates the current Middle East conflict.
A Structural Competitiveness Gap
"The loss of competitiveness of Portuguese industry due to higher energy costs compared to other European countries existed before the conflict, continued during it, and will tend to worsen as other governments adopt measures to protect their industry," the association said.
The critique highlights a longstanding grievance among Portugal's industrial base: that the country's energy costs — driven by a combination of grid charges, taxes, and market structure — are consistently higher than the European average, putting domestic manufacturers at a disadvantage against competitors in France, Spain, and Germany, where governments have intervened more aggressively with subsidies and regulated tariffs.
Credit Is Not a Substitute for Lower Prices
Prime Minister Luís Montenegro's government announced the EUR 600 million credit facility on 9 April as part of an emergency package responding to the energy price spike triggered by the Iran-US standoff. The line is designed to provide working capital to companies facing cash-flow pressures from elevated energy bills.
But the APIGCEE argues that lending money to businesses whose core operations are losing money does not address the root cause. "When all or part of a company's operation becomes unviable due to elevated energy costs, it is not access to credit that makes it viable," the group said.
The association says it has submitted "detailed proposals" to the government on how to reduce both energy and transport costs for electro-intensive industries, though it declined to disclose specifics.
EU State Aid Rules as the Framework
The APIGCEE urged the government to act within EU state aid mechanisms to restore the competitiveness of Portugal's energy-intensive industry, warning that without such measures, "this industry risks becoming economically unviable in our country."
The call adds domestic pressure to a government already navigating the broader geopolitical energy crisis. With other European nations rolling out direct price supports and subsidised tariffs for their industrial sectors, Portugal's reliance on a credit line alone risks leaving its manufacturers — and the jobs they sustain — exposed.
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