French Industry Lobby Warns of Mounting Gas Cost Strain on Manufacturers
A French industrial lobby told Montel News on September 8 that manufacturers were struggling under elevated gas prices, with EU policy tools offering no near-term remedy.
A French industrial lobby warned on September 8 that manufacturers across the sector were struggling as gas prices climbed, Montel News reported. ICE Endex TTF front-month gas stood at €73.33/MWh at 0815 UTC on September 8, with Trading Hub Europe M+1 at €74.50/MWh — levels that compress margins in energy-intensive French industries and leave little room for producers unable to pass costs downstream quickly.6
The chemical sector illustrates the damage accumulated over the past three years. Energy costs in France's basic chemicals industry accounted for 42% of value added in 2023, up from 28% in 2021, driven directly by the gas price surge, the Economist reported. China's chemical producers moved in the opposite direction over the same period: a Chinese chemicals price index fell 36% in three years, sharpening the competitive gap that French producers now face.2
TTF had risen more than 250% since January, according to Reuters, while benchmark power contracts in France and Germany had both doubled, CNBC reported. Four years of price volatility have fundamentally altered the economics of energy-intensive manufacturing in France, even where producers have found ways to reduce consumption.4
Eurelectric, the pan-European power lobby, warned earlier this year against national price caps and subsidies, arguing they distort markets and deliver minimal benefit to consumers. French chemical producers, for whom energy costs rose from 28% to 42% of value added between 2021 and 2023, are unlikely to find much comfort in that position.1,2
EU policymakers have struggled to find a workable response. The European Commission proposed a ceiling of €275/MWh on benchmark European futures — a threshold so far above current prices that it offers no relief to factories paying September 8 bills. A proposal to allow member states to pool emergency gas purchases was blocked by Germany, the Economist reported.3
A survey by ifo, the German research institute, found that 75% of German manufacturing businesses cut back on gas use without reducing output. The other 25% lack that flexibility and are absorbing costs directly, cutting production or idling capacity. French industry faces a similar distribution of exposure, with no targeted instrument available to shield the most vulnerable facilities from sustained price pressure.3
France's smaller businesses face the same problem over a longer time horizon. A study published on May 27 (2026-05-27) by Institut Montaigne, a Paris-based think tank, found that French SMEs need access to stable long-term power prices to decarbonise without sacrificing competitiveness, Montel News reported. Investment decisions in energy infrastructure take a decade or more to pay back; sustained price volatility removes the business case before capital is committed.5
Ursula von der Leyen told EU leaders that Europe had spent an additional €6bn on fossil fuel imports since the start of March, a figure that represents a direct transfer from European industrial budgets to producing nations. Oxford Economics estimated a prolonged conflict could push EU-wide inflation from roughly 2% toward 4% or above — and for French chemical and heavy industrial producers, the energy-specific inflation has already exceeded that broad measure by a considerable margin.2
With TTF front-month holding at €73.33/MWh at 0815 UTC on September 8 and winter demand still several weeks away, the roster of French industrial sites under financial pressure is unlikely to shrink. Whether the French government or the European Commission responds to the September 8 lobby warning with any concrete relief mechanism — or whether the policy response stays well behind the price, as has been the pattern since 2022 — is what traders and manufacturers are now waiting on.6,3