Archive · 12 Sep 2026
Europe’s Factories Face Harsh Winter as Energy Costs Surge
Factories in Europe are having to pay much more for energy.
Gas prices rose after conflict disrupted important shipping routes near the Strait of Hormuz.
British gas prices have almost doubled in two months.
Industries that use lots of energy, such as chemicals, steel, and aluminium, are being hit hardest.
Some companies say their energy bills are becoming too large to manage.
One aluminium maker says energy is nearly one-fifth of its costs.
A chemicals company says it might close its last plant in Britain if prices stay high.
Industry leaders worry this could make European factories less competitive for a long time.
Renewed conflict between the United States and Iran has disrupted supply routes near the Strait of Hormuz.
Wholesale gas prices have reached their highest levels in roughly three years, while British gas prices have nearly doubled in two months.
Energy-intensive industries including chemicals, steel, and aluminium are facing sharply higher operating costs.
A UK aluminium producer says energy now represents nearly one-fifth of its total costs.
A major chemicals company warned that sustained high prices could force it to close its last British plant.
- Who
- European manufacturers, especially companies in the chemicals, steel, and aluminium industries.
- What
- Factories are facing a sharp rise in energy costs that threatens production, investment, and some plant closures.
- When
- The latest price surge has occurred over roughly the past two months, ahead of the coming winter.
- Where
- Across Europe, including Britain, Shropshire, and Hamburg.
- Why
- Conflict involving the United States and Iran disrupted supply routes near the Strait of Hormuz, while Europe continues to face instability during its transition away from Russian gas.
- Wholesale gas prices
- At their highest levels in roughly three years.
- British gas prices
- Nearly doubled within two months.
- Most affected sectors
- Chemicals, steel, and aluminium.
- UK aluminium energy costs
- Nearly one-fifth of total costs for one producer.
- Plant closure risk
- A major chemicals company warned that continued high prices could force it to close its last British plant.
- Long-term concern
- Industry leaders warn the crisis could weaken European manufacturing competitiveness.