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European Heat Council · Position 06

Issued 2026-06-25

Under Council authority

Energy costs in food SMEs

The Council’s position on structurally elevated EU energy costs, the food sector’s energy intensity, and the policy support frameworks available to small producers.

Part I. Findings

The Council records three conditions affecting energy costs for small EU food producers. Each is supported by sources cited at the foot of this Position.

Finding 1. EU industrial energy prices remain structurally elevated relative to international trading partners.

The European Commission’s own data analysis records that industrial gas and electricity prices in the EU, while lower than the 2022 peaks, remain two to four times higher than in the EU’s main trading partners, with implications for long-term industrial competitiveness[1]. The European Central Bank’s Economic Bulletin documents the fiscal policy response to the energy and inflation shock and confirms that the elevated price level has persisted past the acute phase of the crisis[2]. The OECD’s analysis of SME policy responses to the 2022-2023 energy crisis records that small enterprises were among the most exposed economic players, lacking the margins, scale, and support staff to absorb the shock that larger competitors could mitigate[3].

Finding 2. Food and drink manufacturing is structurally energy-intensive and dominated by small and medium enterprises.

The Joint Research Centre’s study of energy use in the EU food sector records that food cultivation, processing, packaging and distribution accounts for approximately 17 per cent of the EU’s gross energy consumption and 26 per cent of final energy consumption, with processing among the most energy-intensive stages of the chain[4]. FoodDrinkEurope’s decarbonisation road map confirms the energy intensity of the sector and the consequent exposure of producers of all sizes to energy price shocks[5]. The Joint Research Centre’s Annual Report on European SMEs records that small and medium enterprises constitute the dominant share of the European food manufacturing base by establishment count[6].

Finding 3. EU policy now explicitly recognises that food sector SMEs require targeted energy-cost support.

On 29 April 2026 the European Commission adopted the Middle East crisis Temporary State Aid Framework, enabling Member States to compensate companies for up to 70 per cent of extra costs attributable to fuel and fertiliser price increases, with a simplified route providing fixed payments of up to EUR 50,000 for small hauliers, farmers, and fishermen[7]. The Temporary Crisis and Transition Framework that preceded it has been the principal vehicle through which the Commission has channelled energy-cost relief to SMEs since the 2022 crisis[8]. Independent analysis by Bruegel records that the Commission’s repeated use of temporary state aid frameworks since 2022 is itself evidence that energy cost pressure on EU enterprises, food sector included, is not a transient shock but a structural condition[9].

Part II. Position

On the basis of these Findings the Council holds that:

  1. Energy cost pressure on EU food SMEs is now a structural feature of the European operating environment, not a temporary shock. Repeated extension of crisis frameworks is policy recognition of that fact.
  2. The Council welcomes the Middle East crisis Temporary State Aid Framework as a recognition that food sector enterprises merit targeted support, but notes that the framework expires on 31 December 2026 and is tied to a specific geopolitical cause. A permanent instrument is required if the underlying competitiveness gap is to close.
  3. The Council holds that energy-cost support eligibility thresholds historically excluded the smallest food producers, whose consumption levels fell below programme floors set with energy-intensive heavy industry in mind. Future instruments should be designed against the actual consumption profile of small food producers, not against thresholds inherited from other sectors.

Part III. Commitments

The Council will:

  1. Track the operational status of the Temporary State Aid framework and any successor instruments, and publish summaries when material changes occur.
  2. Submit comment in EU consultations on state aid for energy costs, SME competitiveness, and food sector decarbonisation where the impact on small producers is material.
  3. Where members consent, document the actual energy cost share of their production cost base, so that the Council’s consultation submissions are grounded in member-level data rather than sector averages.

Revision

This Position will be reviewed annually, or sooner if the Temporary State Aid Framework is extended, replaced, or allowed to expire without a successor instrument, or if Commission data indicates a structural shift in EU industrial energy prices.

Sources

  1. [1]European Commission, Energy prices and costs in Europe (data and analysis). https://energy.ec.europa.eu/data-and-analysis/energy-prices-and-costs-europe_en
  2. [2]European Central Bank, Fiscal policy measures in response to the energy and inflation shock and climate change, Economic Bulletin Issue 1/2024. https://www.ecb.europa.eu/press/economic-bulletin/focus/2024/html/ecb.ebbox202401_08~d136db2a83.en.html
  3. [3]OECD, SME policy responses to the 2022/2023 energy crisis. https://www.oecd.org/content/dam/oecd/en/publications/reports/2023/07/sme-policy-responses-to-the-2022-2023-energy-crisis_d961ed9a/80012fbd-en.pdf
  4. [4]Joint Research Centre, European Commission, Energy use in the EU food sector: State of play and opportunities for improvement, JRC96121. https://publications.jrc.ec.europa.eu/repository/handle/JRC96121
  5. [5]FoodDrinkEurope, Decarbonisation road map for the European food and drink manufacturing sector. https://www.fooddrinkeurope.eu/wp-content/uploads/2021/09/Decarbonising-the-European-food-and-drink-manufacturing-sector_v2.pdf
  6. [6]Joint Research Centre, European Commission, Annual Report on European SMEs 2024/2025, SME Performance Review, JRC142263. https://publications.jrc.ec.europa.eu/repository/handle/JRC142263
  7. [7]European Commission, Commission adopts temporary State aid framework to support sectors affected by Middle East crisis (METSAF), press release IP/26/894, 29 April 2026. https://ec.europa.eu/commission/presscorner/detail/en/ip_26_894
  8. [8]European Commission, Temporary Crisis and Transition Framework (Competition Policy / State Aid). https://competition-policy.ec.europa.eu/state-aid/legislation/temporary-crisis-and-transition-framework_en
  9. [9]Bruegel, The Iran energy shock is a test of European discipline on state aid (independent policy analysis). https://www.bruegel.org/first-glance/iran-energy-shock-test-european-discipline-state-aid

Issued under Council authority. European Heat Council, 2026-06-25.

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