German chem union says phase-out of coal must be reversed

10 November 2009 20:18  [Source: ICIS news]

TORONTO (ICIS news)--Germany should reverse a decision to phase out subsidised coal production by 2018, the leader of the country’s chemicals and energy union IG BCE said on Tuesday.

The decision, from 2007, was no longer justifiable in light of looming energy shortages, rising prices and the fallout from the global economic crisis, Michael Vassiliadis said in an address to a coal industry convention in Essen.

“The exit from coal was the wrong choice before [September’s] federal election, and it remains wrong after the election,” he said.

Proponents argued the exit would save €1.4bn ($2.1bn)/year in subsidies, he said.

However, Germany’s banking system had received much larger support from the government during the crisis, Vassiliadis said, and he went on to ask: “Why are secure energy supplies less important?”

Coal’s environmental impact could be addressed through carbon capture and storage technology, where Germany has a technological advantage, he said.

Also, there were opportunities within the chemical industry for the productive use of carbon dioxide, he said.

A reversal on coal would impact RAG Stiftung, the majority owner of specialty chemicals major Evonik.

RAG, coal foundation charged with overseeing the phase-out, had been looking to list Evonik and use the proceeds to pay environmental expenses as mines are closed in a programme running to 2018. 

In 2008, RAG sold a 25.01% stake in Evonik to private equity firm CVC and shelved plans to list Evonik because of unfavourable capital market conditions. However, it remained committed to eventually listing Evonik and raise additional funds, it said at the time.

Evonik, for its part, recently dissolved its investor relations department. However, a listing could happen “in the medium term”, depending on captial market conditions, according to information still posted on the investor section of its website,

($1 = €0.67)

For more on Evonik and other producers visit ICIS company intelligence
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By: Stefan Baumgarten
+1 713 525 2653



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