The European ceramics industry is grappling with intense competition from abroad, particularly from countries with lower labor and environmental standards. Cheap imports, especially from India and China, pose a significant threat to European suppliers. In response, the European Union has implemented tariffs on Indian tiles, but industry leaders argue that these measures are insufficient to stem the tide of low-cost imports. Italy’s Emilia-Romagna region, a hub for the ceramics sector with an annual turnover of approximately €8 billion, stands at the forefront of this challenge.
Over the past decade, house prices in the EU have surged by an average of 48%, while rents have climbed by 22%. Concurrently, energy prices have soared, exacerbating challenges for the tile-making industry, which relies on kilns operating at 2,000°C to harden clay. In this context, Trade Defence Instruments, including anti-dumping and anti-subsidy measures, are crucial for safeguarding European businesses against imported goods with artificially low prices.
Despite the EU's efforts, the ceramics sector in Italy remains vulnerable. Companies in India continue to export materials to Europe at prices that undercut local producers. Graziano Verdi, an industry expert, highlights the rapid growth of Indian market share in Europe:
"In just a few years, India had seven per cent of market share in Europe and in the last year they increased more than 60 per cent," – Graziano Verdi
The Italian ceramics industry isn't alone in its struggles. The influx of ultra low-cost tableware from China has previously devastated European small and medium-sized enterprises (SMEs). Verdi notes the EU's successful intervention in the electric bike industry through targeted tariffs introduced in 2019:
"For China, Europe decided at the right moment with the right taxation and also very quickly. Today [ceramic inputs from] China make up less than one per cent of the European market." – Graziano Verdi
This success story underscores the importance of robust trade defense measures to ensure fair competition. The Foreign Subsidies Regulation launched in 2023 further aims to prevent foreign entities from securing public procurement contracts by leveraging state aid.
The Emilia-Romagna region employs around 20,000 individuals directly and indirectly in the ceramics sector. The industry is vital not only for its economic contribution but also for job creation. Jeroen Beumer emphasizes the significance of maintaining high-quality standards to protect domestic industries:
"You’ve got to have good products and high quality so protecting in the sense of setting norms and standards is going to be very important for the future of our industry," – Jeroen Beumer
He also highlights the role of local production in job creation:
"The jobs, that’s the second part I think, making these products here in our own country, it’s good for creating jobs here for people," – Jeroen Beumer
However, as Inès Van Lierde warns, there is a risk that stringent environmental regulations could undermine Europe's industrial framework:
"We run the risk to have maybe the cleanest atmosphere with zero emissions, but zero emissions, because we will have lost our industrial network," – Inès Van Lierde
The EU must strike a balance between environmental sustainability and industrial viability. The experience from the electric bike sector demonstrates that timely and well-calibrated tariffs can significantly reduce imports and protect domestic industries.
Verdi's reflections on tableware production underline the fragility of certain sectors within Europe:
"There are really few companies in Italy and Europe that still produce tableware because most of the industry was destroyed," – Verdi
The ceramics sector's challenges extend beyond tariffs and subsidies. Rising energy costs and housing expenses add pressure on businesses struggling to maintain competitiveness. As kilns require substantial energy input, these rising costs can severely affect profitability.
Leave a Reply