Germany’s Merkel insists on nuclear tax, petchem firms concerned

26 August 2010 17:47  [Source: ICIS news]

TORONTO (ICIS)--German Chancellor Angela Merkel on Thursday caused concerns for the country's domestic chemical companies after insisting on her government’s plan for a tax on nuclear power and hinting at additional burdens for the energy industry.

“Beyond [the planned tax], we will need to talk about ways – and I do avoid the word ‘levy’ - the energy sector can make a contribution towards renewables,” Merkel told German state television.

The debate was directly linked to proposals to extend the life-span of the country's existing nuclear power plants, she said

Merkel said she favoured the extension of a plants’ life-span but did not say by how many years. The idea of an extension has been highly controversial, as many Germans want the country to quickly end all nuclear power production.

Germany's chemical industry trade group VCI, in a joint statement with other energy-intensive industries, warned against further increase in energy costs.

Germany’s energy-intensive industries, including chemicals, were facing tough international competition. As such, higher taxes on energy would harm the country as a whole because they would hit the competitiveness of many industrial firms, the Frankfurt-based chemical trade group said.

Earlier this week, German industry leaders, including BASF’s CEO Jurgen Hambrecht, signed an open letter opposing Merkel’s plans to tax nuclear power providers.

The government said in June it would levy €2.3bn ($2.9bn) a year from the nuclear industry from 2011 to help cut the budget deficit. It also planned to cut breaks on eco-energy taxes, a move that has been strongly opposed by chemical producers.

($1 = €0.79)

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