1、How to approach rising energy costsStrategy&Agenda1.EU energy crisis 2.Industry position3.Strategy4.Implementation5.Recommendations2Strategy&12345Strategy&Ukraine-Russia war Ukraine-Russia war Energy prices are rising across the globe,but have most significantly affected Europe due to the closure of

2、 Russian pipelinesGlobal energy prices1)Brent oil and coal price from Federal Reserve Bank of St.Louis 2)Gas prices from Dutch Title Transfer Facility Source:Reuters,IEA,Strategy&analysis3201802017201920202021202220235001,0002,000US Henry hubEU Dutch TTFAsia ASIA LNG201920202023201702018300202220216

3、009001,200100Hard coalOil(Brent)Gas price disparity has been increasing since 2021The European Union imported more than 40%of its gas from Russia in 2020.The growing dependence on Russian gas was due to low prices and easy accessibility owing to the pipeline networkOil prices increased due to signif

4、icant boost in demand from unexpected steep economic growth after Covid low,and reluctance of oil-producing countries to rush to adapt oil supply rates accordinglyCoal price increase similar to oil,with additional supply chain interruptions due to pandemic(coal is imported from Australia and South A

5、frica)Price index of fuel sources1)(2017-2022,Jan 2017=100)Price index of natural gas2)(2017-2022,Jan 2017=100)Energy prices are set to stabilize at a lower level within the next 2 years due to the growing penetration of renewable energy in the mix and a more diversified portfolio of sourcing option

6、s1Strategy&19%29%23%24%18%36%3%Rising natural gas prices do not affect every country the same way,with relative impact depending on both price and energy mixEnergy crisis-impact:EU industrial natural gas price4OilNuclearRenewablesCoalGasOtherPoland has also faced concerns over high natural gas price