In a press release posted on its web site on Thursday, the Vitality Industries Council (EIC) stated its newest survive and thrive report “reveals continued reluctance amongst corporations to enter new markets on account of unclear monetary incentives, rules, and commerce agreements”.
The EIC, which describes itself as one of many world’s largest vitality commerce associations for corporations supplying items and companies to the vitality industries worldwide, famous within the assertion that the report highlights the continued challenges confronted by the worldwide vitality provide chain amidst geopolitical and coverage uncertainties.
“2024 sees a shift from growth occasions to an setting crammed with uncertainty, as corporations grapple with elevated coverage and geopolitical challenges,” EIC CEO Stuart Broadley stated within the assertion.
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“Whereas alternatives abound, the dearth of readability on monetary incentives and rules makes navigating these waters more and more advanced,” he added.
“This 12 months we’re seeing a combined image. Whereas exercise throughout the vitality provide chain stays excessive, corporations are dealing with important hurdles on account of coverage uncertainties. It is a essential time for the business,” he continued.
For the eighth consecutive 12 months, the survive and thrive report notes that the event of recent export or worldwide areas stays the least used progress technique, with solely seven p.c of corporations venturing into new markets, the assertion famous, including that almost all focus as a substitute on home or well-trodden abroad markets like North America, Europe, and the Center East.
“Excessive prices and inadequate authorities assist, corresponding to lack of economic assist and unfavorable tax environments, are main deterrents,” the assertion stated.
“Clear insurance policies and commerce agreements are important for making new market entries extra possible, in keeping with the views of provide chain companies shared within the report,” it added.
Broadley highlighted within the assertion that “authorities assist, with fewer exclusions round oil and fuel, is essential for corporations to navigate new territories, lots of which have essential hydrocarbons actions which might be additionally in transition”.
“Our members are asking for extra engagement from commerce missions and embassies to supply mandatory market entry and early readability on new market challenges corresponding to native content material wants,” he added.
Creating client-facing companies and options has emerged as the preferred progress technique this 12 months, with 82 p.c of provide chain corporations now working straight with operators, more and more sidestepping the standard mannequin of contracting through tier 1 EPC contractors, the assertion famous.
“What our members are telling us is that the vitality provide chain must be listened to by policymakers,” Broadley stated within the assertion.
“Clear and constant insurance policies, monetary incentives, and an understanding of your entire and largely built-in provide chain’s wants are essential. Policymakers ought to de-silo vitality coverage, guarantee an overarching goal with contributions from all stakeholders, and acknowledge the impression of elevated taxes on operators,” he added.
“Upgrading capabilities to fulfill net-zero calls for, reassessing native content material rules, and offering a transparent roadmap for vitality initiatives are important steps to assist and nurture the vitality provide chain,” he continued.
In a press release posted on its website in July final 12 months, the EIC outlined that, in keeping with its seventh survive and thrive report, “regardless of rising demand and impressive nation pledges for internet zero, the vitality provide chain is shifting into oil and fuel, triggered by a scarcity of constant and worthwhile work in inexperienced initiatives, elevating issues that internet zero 2050 commitments may even be delayed”.
“The world’s oil and fuel markets are experiencing a interval of great progress and a return to growth occasions, in keeping with the EIC Report, backed up by EIC’s Monetary Funding Choice knowledge, which paints a sobering image that oil and fuel initiatives are extra useful and usually tend to proceed with full funding, in comparison with renewable and transition applied sciences corresponding to wind and hydrogen,” that assertion famous.
In that assertion, Broadley stated, “the a lot decrease ranges of funding for inexperienced initiatives, in comparison with hydrocarbons, highlighted on this report, is having direct impression on vitality provide chain companies”.
“They don’t seem to be seeing sufficient renewable and transition associated work cascading down into their order books. They will’t look ahead to coverage pledges anymore, so they give the impression of being to extra energetic markets like oil and fuel to assist their progress plans,” he added.
“That is such a misplaced alternative. The provision chain needs to be a part of, and to drive, internet zero options, however alternatives simply aren’t there, in something like sufficient quantity or profitability,” he continued.
“It’s excessive time for a actuality examine. We ask governments and vitality coverage makers to behave now, to deliver stakeholders collectively to handle this vitality coverage disaster, to re-ignite funded demand for clear vitality services, and to supply the best coverage setting that encourages funding, innovation and the seeding and rooting of future, worldclass, green-technology exporting companies,” Broadley went on to state.
The EIC is an award-winning world commerce affiliation for the vitality provide chain with a worldwide membership of over 900 corporations masking all vitality sectors, the group states on its website. Established in 1943, EIC advocates for its members by working carefully with governments and key stakeholders, its website provides, noting that the group works on behalf of its members throughout governments and businesses to replicate their wants and lift the voice of the provision chain globally.
To contact the writer, e mail andreas.exarheas@rigzone.com
