Smurfit CEO warns of fuel costs

Competitiveness:European competitiveness is being stifled by high energy costs, the chief executive of Smurfit Kappa has said.

Addressing some 400 business leaders at the Ibec CEO conference in Dublin yesterday, Gary McCann said Europe needed a co-ordinated approach to reducing energy costs and high taxes on energy. “Increasing taxes on energy is not a recipe for success.”

He also criticised Europe’s “refusal to research shale gas” options. The US, through a shale gas boom, is said to have cut energy prices and carbon dioxide emissions to a 20-year low.

Markus Breyer, director general of lobby group BusinessEurope, said the price of gas for industrial consumers was 30 per cent cheaper in the US than the EU.“It’s difficult for companies to remain competitive.” He said Europe needed a market-driven approach to energy and climate-change policy.

High energy costs were also criticised by Ericsson chairman Leif Johansson, who said 50 per cent of energy costs were tax. “I have more sympathy for the carbon dioxide tax than the general ‘slap 50 per cent tax on all energy’.”

The conference also heard that high taxes and labour policies were affecting European competitiveness.

Ibec chief executive Danny McCoy said Ireland and other European countries needed a tax system that rewarded work and supported investment, and labour market policies that “keep us flexible and competitive”.

“More needs to be done to make Ireland more competitive, more successful and more prosperous. The key to achieving this is the same at a domestic level and at a European level: we need growth.”

He said the recent deal on European financial transactions would put European firms at a competitive disadvantage.