RISING ENERGY COSTS are posing a threat to businesses and may impact on their viability, lobby group Ibec has warned.

The continuing increase in the cost of electricity and gas is significantly impacting on households and businesses, with Ibec saying that energy prices for business could rise up to four or five times.

Speaking to RTÉ’s News at One, Fergal O’Brien, Ibec’s Director of Lobbying, said that the continued increase in energy prices pose a “real challenge for many businesses to continue in operation”.

“For companies that are coming off kind of contracted rates and looking to the prices for the year ahead, they’re looking at about four to five times an increase of what they have been paying,” said O’Brien.

“For smaller companies, this could mean hundreds of thousands and tens of millions for larger companies.

“We are at a situation where government has previously identified the need to support households. It now needs to step in and support enterprises that are becoming extremely vulnerable to what is now an energy affordability crisis.”

In particular, O’Brien highlighted engineering firms and building material manufacturing as being particularly vulnerable due to their high energy usage and low margins.

He said that it may not make sense for some firms to run at full production levels and to instead have work hours reduced or shifts cut.

“Unfortunately, some of the sectors we’re talking about are probably sectors that are fairly low margin businesses where we have high scale production, whether it be in building materials or other related sectors, that will be energy intensive.

“A lot of companies in materials engineering for both the export and the domestic market, they could face significant viability challenges and for some of them, it may not make sense to have full production capacity at those energy costs.”

It comes as Ibec launched their pre-budget submission this morning, which totals in at just under €2 billion in spending and tax proposals.

In particular, the business lobby group is calling for “emergency supports” for businesses to offset the higher energy costs.

“In the short term, the focus of the business community will be on dealing with the impact of a rapid escalations in costs, particularly energy and labour costs,” said Ibec Head of National Policy and Chief Economist, Gerard Brady.

“This must be supported by a significant immediate package of emergency energy supports under the new EU State Aid framework along with a package of Budget Day incentives for energy efficiency and low carbon investment in 2023.”

These energy efficiency and low carbon investments include spending €45 million to help drive the decarbonisation of Irish industries and rolling out renewable energy.