Michelin sets out energy-cost management plans

Paris – Michelin has explained how it is dealing with the steep rise in energy costs – in both the short- and medium-term – in a presentation to the Goldman Sachs Global Autos conference.

Energy costs have risen to an estimate of around 4.0% of Michelin’s sales in 2022, compared to around 2.5% in 2021 and 2.0% the year before, Michelin informed the 8 Dec event.

For the short term, the French group reported that prices for energy used in its European operations had been ‘hedged 50%’, with the cost position secured for 2023.

Meanwhile, the tire and rubber-products maker also has a short-term mitigation plan to ensure continuity of production – with back-up sourcing of fuel, including “coal by exception”.

Around half of Michelin’s European production is located in ‘lower Russian gas sensitive’ countries, the group’s presentation further explained.

Looking to the medium-term, Michelin highlighted its energy-transition programme towards a goal of net zero-emissions by 2050.

Features of the transition plan include a targeted 50% reduction in CO2 emissions by 2030, as well as a capital spending allocation of €80 million/year.