Mobilizing Consumer Demand for Sustainable Investments: Strengthening Europe’s Heavy Industry

Overview

The European heavy industry sectors—steel, chemicals, refining, and fertilizers—are the core of Europe’s economy. They supply vital materials for construction, manufacturing, food, and healthcare. These industries support millions of jobs in the EU. They also add many greenhouse gases to the air. Their costs are rising because of high energy prices, higher CO₂ costs, and strong competition from cheaper imports.

Challenges Facing EU Heavy Industry

• Economic Pressures: Energy prices rise, and feedstock costs climb. CO₂ costs add more expense. These forces push companies to close plants and move production out of the EU.
• Carbon Offshoring: EU makers cut their emissions. Imported goods, however, add more emissions that cancel these gains.
• Regulatory Impacts: The EU Emissions Trading System stops giving free allowances. This change raises costs for EU producers. The Carbon Border Adjustment Mechanism aims to stop unfair imports but can be bypassed.
• Investment Barriers: Cleaner production costs more than old ways do. This cost gap is too wide for market forces, current technology, public money, or company profits to fill alone.

The Need for Demand-Side Policies

The Deloitte report, made with industry groups, shows that supply-side fixes are not enough. Instead, policy must boost consumer demand:

• Consumer Price Impact: A small bump in prices can cover the cost of sustainable goods. For most items, this change is less than 1%. Steel, plastics, and similar inputs are a small part of the final price.
• Emission Reduction Potential: Slight price increases can push firms to cut emissions. Consumers can make greener choices.
• Avoiding Deindustrialization: Strong demand for eco-friendly goods helps keep industry in the EU. It also cuts reliance on high-emission imports.

Proposed Framework: Demand Mandates

The framework calls for clear rules that:

• Push for green products by requiring or rewarding their use.
• Let producers recoup costs for new cleaner technologies.
• Work with existing policies that manage supply and reduce emissions.

Conclusion

Consumer demand can drive investments in sustainable technology. Borrowing ideas from dependency grammar, each idea directly links to the next. This approach meets economic and green goals at once. It helps secure EU industry and meets climate aims.

For more: Download the full Mobilizing consumer demand for sustainable investments report by Deloitte. It explains ways to boost sustainable industrial investment in Europe. (PDF, 1MB)

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