Pedro Sánchez announced a VAT cut on gas from 21% to 5%. The move, however, may have limited impact on heating bills unless the decree includes additional measures. Alicante’s industries face little visible fallout from the policy, even as the price shock driven by the Ukraine conflict continues to bite. In textile sectors where many companies operate, especially in finishing, producers are trimming lines to avoid losses. Ceramic and tile manufacturers, with their strong footprint in the province, have been hit hard; Escandellachoosed plans to shutter three of its four bakeries this September due to unsustainable costs.
The VAT change is seen as neutral by many firms because VAT paid is recovered later through refunds. Lower rates do not automatically translate into Treasury support, according to the head of the Textile Entrepreneurs Association, Ateval. Pepe Serna. He sounded the first alarm, and by the end of the first quarter nearly a dozen firms were processing ERTE for some of their personnel. Since then, the situation has worsened despite repeated appeals for help from companies.
Some support programs provide only partial relief, such as subsidies of about 2400 euros per worker for gas-consuming companies. These measures barely cover the extra monthly costs. The price of gas has multiplied more than tenfold, with futures hinting at still higher rates. Serna and others note that water heating needs also strain operations. These firms often operate on behalf of others, spreading the impact across the entire industry, according to Ateval’s leadership.
Companies are doing what they can: shutting down high-gas lines, prioritizing cheaper processes, and accepting lower production as the consequence. In ceramics, Castellón hosts tile manufacturers while Alicante features Escandella as a major player. After August, when production was at full tilt, the firm turned off three of its four ovens starting September 1 last year. The gas bill has made production untenable, the general manager stated. The government is being urged to offer relief, as other countries provide substantial adjustments. In France, for example, 30% of the difference between last year’s price and the current price is subsidized, a level not seen here, according to the executive.
The situation meant a significant cost share for Escandella, representing roughly 25% of fuel expenses and rising to over 50% at times. The company currently employs around 250 workers and does not rule out ERTE measures, including temporary vacations and days off, if the crisis persists. In the meantime, the firm has decided to pull stock from a bakery to fulfill orders and cover potential uncertainties. The general manager emphasizes that the scenario is deeply worrying and calls for stronger government action.
The price of natural gas recently hit a new peak, reaching 278 euros per megawatt hour. In other provincial sectors, the electricity price remains the central problem. In the metal sector, where energy intensity is high, many firms are reorganizing production to operate during cheaper hours when electricity costs are lower. A direct relief approach is deemed essential, with confidence that the European Union’s proposed pricing reform could soften bills, explains the head of the federation of metalworkers.
In the marble field, many companies are evaluating whether to expand or delay openings, as production lines resume after holidays and precautionary measures are considered. Leaders of the Valencian Entrepreneurs Association and related groups note that electricity prices may not be the single highest cost, but margins are under pressure and price increases are being passed to customers where possible.
Within the plastic sector, firms pursue aggressive production schedules, consolidating output into four days and pausing machinery on the fifth to save energy. The director of the IBIAE employers’ association describes this as a production optimization strategy that reduces the need for ERTEs. Among future options, investments in photovoltaic capacity are being explored as a way to cut costs and stabilize energy expenses.