Energy crisis holds back industry, economic growth at risk?

With the current geopolitical chaos, by how much are energy costs increasing for companies? The Centro Studi Confindustria is still doing the maths. According to the estimates, if the war were to continue through 2026, with an average annual oil price of 140 dollars, companies would pay 21 billion more than in 2025 for energy and the incidence of energy costs on total costs would rise from 4.9% to 7.6%, an increase of 2.7 percentage points. This would return close to the critical levels already experienced in 2022 (8.3%), which are not sustainable for Italian companies. These, in fact, would see their competitiveness in Europe and on international markets eroded, especially as oil and gas prices remain lower for companies in other areas of the world, particularly in the American continent.

In a less adverse scenario, if the war ended in June (a hypothesis that does not appear to be within reach at the moment, given the stalemate in negotiations), with oil at an annual average of 110 dollars and assuming pre-conflict trade flows resume and the capacity of the Gulf countries remains adequate to support world supply, italian companies would find themselves paying €7 billion a year more in energy bills and the incidence of energy costs would be one percentage point higher, rising from 4.9% in 2025 to 5.9 in 2026.

The most energy-intensive industries are the ones suffering the heaviest consequences of this crisis and may experience 'energy lockdowns'. In addition to suffering from the unstable supply of the main fossil resource, natural gas, due to the Russian-Ukrainian war, they also have to bear the burden of ever-increasing electricity bills and comply with EU permits on CO2 emissions for sustainable production. Moreover, the energy crisis that hit China in the last months of last year had a domino effect on a global scale, with serious repercussions on the economies of many countries.

Although the pharmaceutical and life science industries are not among the most exposed to the energy crisis - the food, textile, automotive, glass and steel industries, for example, are much more so - they are nevertheless suffering a significant impact, especially on the cost side. The aluminium used for drug packaging, for example, has increased by up to 25%, while the prices of glass, paper and active ingredients have also risen. Costs that, by the way, the pharmaceutical industry cannot pass on to consumers, because it largely operates with administered prices. Then there is the issue of supply chain vulnerability: crises make the supply chains of raw materials and intermediate components more fragile. To this must be added the risks related to logistics: materials, healthcare products and drugs have to be transported and, therefore, rising fuel prices are a significant cost item.

In the immediate future, companies in all sectors, life sciences in the lead, are implementing backup plans, adapting supply chains and looking for alternative suppliers. Solutions that, however, in the long term come up against regulatory constraints, high quality standards and long validation times. According to the experts, therefore, measures are needed to support industry in general and the life sciences sector in particular, which is considered strategic for the European economy, the protection of public health and the industrial policy of the future. All the more so since this is not just a cutting-edge sector, but a real social infrastructure, in which scientific research, technological development, public governance and fundamental rights converge.